When the CEO of Microsoft Satya Nadella told investors on Monday about her company’s plan to acquire a voice recognition specialist Nuance for $ 16 billion, he stressed the importance of artificial intelligence in health care.
Nuance’s software listens to doctor-patient conversations and transcribes the speech into organized, digitized medical notes. This helps to explain the high price, although speech Recognition has become commonplace and now comes with every smartphone and laptop. But Microsoft can also see much wider potential for Nuance’s technology.
Gregg Pessin, a Gartner analyst, says the deal gives Microsoft “an entry point into the healthcare industry and a huge customer base already manages this area.”
Siri and Alexa can understand your shopping list, but Pessin says Nuance has spent time and effort developing technology that captures the specialized language of medicine; it won’t be easy to replicate for other companies, he says. “This process of getting the system, the engine of AI, to understand the medical jargon that’s important and difficult – I think that’s the real gem.” Pessin says Nuance might be able to develop parallel systems for other industries with their own jargon, like law.
Nuance’s voice transcription technology is used by more than 300,000 clinicians and 10,000 healthcare organizations around the world, according to the most recent financial report, for the year ending September 2020.
These relationships allow Microsoft to access a market that promises to be worth billions of dollars a year. A IDC report published in August 2020 estimates that global AI spending will more than double from $ 50.1 billion in 2020 to over $ 110 billion by 2024, and it named healthcare as one of the largest sectors. Microsoft said in a statement that the acquisition would double the value of the healthcare market it enters to $ 500 billion.
Health care is widely seen as a key industry for applied AI. Numerous research studies show the potential of AI algorithms to detect disease in pictures or mine medical records for information on treatment routes. And as long as challenges remain, like get doctors to trust technology or preventing creeping bias When the data used to train medical algorithms is not sufficiently diverse, an increasing amount of AI is likely to be deployed in healthcare in the years to come.
Speech Recognition and natural language understanding have improved dramatically in recent years, thanks to advances in AI. The technology has been around for decades, but new methods of machine learning have made it easier to train machines to recognize speech reliably. Nuance, which has its origins in a company founded in 1992, faces increasing competition from companies like Google and Amazon, but it also has experience honing technology and selling in niche markets.
“The healthcare industry is huge and that’s probably the number one reason Microsoft buys Nuance,” says Ian jacobs, analyst at Forrester. “But the price reflects the overall value that Nuance brings, everything it does.”
Besides healthcare software, Nuance is making a platform for building chatbots, voice authentication technology and call center conversation monitoring tools. Jacobs says the $ 16 billion price tag reflects the wider potential of these technologies as well as the growing importance of AI for healthcare.
Jacobs says the deal may also reflect an expectation that more health care will be provided on the internet. “Telehealth has become more accepted – it’s not going to go away,” Jacobs says. He thinks Microsoft may be betting that more sophisticated forms of AI will eventually be able to triage patients before they see a doctor, or offer advice to healthcare professionals in real time. “Think about the ability to increase the capacity of the clinician,” he says.
Dan Miller, Senior Analyst at Opus Search, recognizes that Nuance offers more than just a way to reach physicians, and he says this fits with Microsoft’s strategy to sell AI and cloud software in specific industries. “There are a lot of advantages,” he says. “Is the price correct? It just comes down to running and managing Microsoft to make it fit for what they do. “
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