Microsoft’s acquisition of Nuance clears antitrust hurdle

In announcing its plans to acquire Nuance in April, Microsoft focused on the benefits Nuance will bring to its healthcare business. Nuance is a leading healthcare transcription service provider known for products such as the Dragon Ambient Experience (DAX), which records and transcribes patient-provider communication.

Yet Schoeller said the Nuance acquisition goes beyond healthcare and positions Microsoft to become a stronger competitor in other sectors such as customer service.

“Not all CRM vendors land the desktop in customer service operations,” Schoeller said. “But Microsoft — with Dynamics 365, with their unified communications capabilities with Teams, and now with speech recognition — is starting to assemble a number of pieces to be a stronger player in the customer service space.”

Andy Thurai, vice president and principal analyst at Constellation Research, echoed the point, noting that the Nuance acquisition puts Microsoft in a “powerful position to dominate customer service, sales, marketing — in almost any industry — offered on a solid cloud foundation.”

Thurai, who was also not surprised that the acquisition made it past antitrust scrutiny, said the crux of Microsoft’s acquisition is to build out comprehensive AI services for customers.

“Microsoft’s acquisition is not for natural language processing or speech recognition. They are looking to build an enterprise AI empire,” Thurai said. “Combining Nuance’s speech recognition capabilities with Microsoft’s existing NLP, AI capabilities … puts them in an advantageous position to address the larger enterprise AI market.”