Microsoft and Nuance a Brilliant Play for Redmond

Bloomberg reports that Microsoft “is in advanced talks” to purchase Nuance. I’ve not been able to stop thinking of this move and I’ll be the first to admit that it surprised me, but the more I think about it and the more I talk to others in the industry this is an absolutely brilliant move. Here are my crystal ball predictions:

The patent play: Nuance comes with over 2000 patents. This is a huge cache which will no doubt be useful for the upcoming AI wars. This will be a huge boosts to Microsoft’s already huge R&D commitment in this space.

This hospital bill is brought to you by Microsoft: Nuance makes the majority of their money from the healthcare sector. We’re not talking just dictations or document management, we’re talking EHR, billing, and diagnosis software. Windows and Office are already prevalent in the healthcare space, this puts MS in the heart (get it?) of hospital operations and processes.

Cortana, it was the best of times it was the worst of times: Did you know that Windows 10 was Cortana’s big debut in the desktop space? Yeah neither did anyone else. Cortana began in 2014 as a direct competition to Alexa which was released the year before. At the time Microsoft was beginning to make some heavy bets in to the mobile space with Windows mobile. Well it’s a decade later and Windows mobile is dead, Cortana’s OS integration has been neutered and I’ve never seen another human being speak to their Windows PC. I believe this is going to change that with a huge marketing push of some college student dictating their final paper to their Microsoft Surface device while getting a manicure.

Where we’re going we don’t need passwords: Nuance comes with perhaps one of the oldest if not best speech biometrics software. Imagine joining a Microsoft Teams meetings where you call in and start speaking and you’re authenticated immediately. Or allow for “signatures” based solely on your voice. Verification and authentication continue to be huge and the rise of better and better “deep fake” technology will allow for some sort of trust verification service with Nuance biometrics in the middle of it.

(Part 1) We’re taking our ball and going home: This one is near and dear to me heart. If a Cisco call center customer wanted to have speech recognition or text to speech there was only one name in town. Nuance. This has changed a bit in the last few years with the introduction of LumenVox as an additional option. And this has changed even further in the last 18 months with Cisco supporting Google’s DialogFlow, but Nuance still reigns supreme. I can see MS increasing the pricing of an already very expensive product making it prohibitive for some call centers to run their software.

(Part 2) I can see clearly now the rain is gone: Did you know that Azure stands for the color blue of a cloudless sky? Microsoft will be able to create a very defensible moat around their Azure offerings by being the only provider to have the latest and greatest Nuance services. In addition, some telephony cloud provider, who are already battling Amazon and who white label Nuance products as part of their offering, might be forced to either consume more Azure resources to get better pricing or completely get priced out from this technology and watch the competition pass them by. This sets the stage for Microsoft to be in the driver’s seat of what UC or CC provider you might choose next if you have an already deep Nuance integration or if your call center must use Nuance.

There are so many layers to this. So many angles and plays. It’s going to be great to see. Well, until Microsoft announces that they are buying a contact center platform.

~david

 

 

 

 

 

 

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