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Microsoft’s Nuance buy and the future of healthcare

If you want to take the temperature of the market for health technology, consider Microsoft’s announcement this month that it’s buying Nuance for $19.7 billion — Redmond’s biggest purchase after its 2017 acquisition of LinkedIn for $26.2 billion.

Nuance offers a range of products (and holds a portfolio of patents) focused on conversational AI and cloud-based ambient clinical intelligence for healthcare providers. The acquisition follows a strategic partnership the companies announced in October 2019 to integrate Nuance healthcare SaaS technologies with Microsoft’s Azure cloud environment.

Microsoft CEO Satya Nadella’s PR statement suggests that he considers the purchase strategic for enterprise AI in general and healthcare IT in particular: “AI is technology’s most important priority, and healthcare is its most urgent application,” he said. “Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”

The Nuance buy is the latest signal of Microsoft’s determination to be at the forefront of digital health transformation, a movement to harness technology innovation to revolutionize the $10 trillion-plus healthcare market.

Intrinsic to digital health transformation is the seamless and secure collection, storage and rapid analysis of vast quantities of healthcare data that can be shared transparently among medical specialists and with patients who are empowered to guide their own healthcare journeys. That takes a lot of data-crunching and data capacity, and that’s where cloud-based AI is indispensable.

The COVID-19 pandemic has driven superfast adoption of telemedicine and other remote technologies among healthcare organizations — many of them built as stopgap measures under crisis conditions. But now that patients have become accustomed to medical access that approaches the transparency of buying groceries or depositing checks online, those organizations have nowhere to move but forward as they implement more robust solutions to meet demand.

As the Microsoft-Nuance deal demonstrates, healthcare IT has become a bellwether for new directions in enterprise technology overall. Smart marketers should be watching this space very closely, whether they want to prospect new healthcare clients or understand how these new adventures in cloud-based AI will shape other markets and touch their buyers very soon.