雅虎香港財經 Microsoft's $19.7B Nuance deal shows it's going after the 'golden ticket' of health care
The nearly $4 trillion U.S. health care industry is becoming the next battlefield for Big Tech, and Microsoft (MSFT), on Monday, launched its largest salvo yet with the acquisition of voice recognition company, Nuance (NAUN).
The deal valued at $19.7 billion, Microsoft’s largest since it bought LinkedIn in 2016 for more than $26 billion, will give the Redmond, Washington-based company a big boost in what is expected to be a years-long race against fellow tech giants Amazon (AMZN) and Google (GOOG, GOOGL) to develop health care technology.
Nuance, whose voice recognition technology formed the basis for Apple’s voice assistant, Siri, had already partnered with Microsoft in 2019 to bring artificial intelligence (AI) to doctor’s visits.
“I think this is one of many steps that Microsoft needs to take to solidify their business in the health care market,” Jefferies analyst Brent Thill told Yahoo Finance. “Obviously, Amazon is making a push into the industry as well, and I think everyone is going after the golden ticket of health care.”
Microsoft, Google, Amazon, and even Apple (AAPL) have been working in the health care space for years, but the coronavirus pandemic supercharged the need for health providers to gain access to everything from improved video conferencing capabilities to better electronic health records (EHR) access for patients.
With Nuance, Microsoft will further build out its Microsoft Cloud for Healthcare service, which it launched in November and serves as a one-stop shop for health care providers and patients alike. And there’s plenty of market up for grabs.
According to Microsoft, the Nuance acquisition will double the company’s total addressable market in the health care space, bringing its TAM to $500 billion.
Microsoft is gaining more than new technologies
Nuance, however, gives Microsoft a significant leg up in health care, thanks to Nuance’s wide reach. According to Microsoft, Nuance is currently used by more than 55% of physicians and 75% of radiologists in the U.S., and used in 77% of U.S. hospitals. In other words, Microsoft isn’t just paying for Nuance’s technological prowess, but for its customers too.
“This is to some extent a customer acquisition story,” said Forrester vice president and principal analyst J.P. Gownder. “Nuance's strong position in the health care vertical means Microsoft is buying a customer base as much as anything else.”
The technology acquisition will be good for Microsoft, too, Gownder added. “Nuance's strong position at the edge (medical dictation and transcription) will ultimately tie health care customers more strongly into Microsoft's Azure Cloud and intelligent services,” Gownder said.
And then there’s Microsoft and Nuance’s Dragon Ambient eXperience, or DAX. Launched in September, DAX is an ambient clinical intelligence (ACI) platform that ties into Microsoft’s Teams to quickl record and transcribe secure conversations between doctors and patients.
The service then transforms the notes it records into clinical documentation, reducing paperwork so doctors can focus more on treating patients.
According to Wedbush analyst Dan Ives, DAX has the potential to be a goldmine for Microsoft, especially with Nuance now a part of the company.
“From a valuation [some of the parts] perspective, we believe over time the DAX business alone could be worth between $3 billion to $4 billion to [Nuance’s] valuation that [Microsoft] recognizes front and center, as this AI next generation platform represents a potential paradigm changer for hospitals/health care clinics/specialists over the coming years.”
Competition from the ‘mega clouds’
But Microsoft isn’t the only company vying for opportunities in health care. Amazon, the world’s largest cloud provider ahead of Microsoft and Google, is also using its formidable cloud capabilities to reach doctors and patients via its Amazon Web Services platform Health and Life Sciences.
The offering provides customers with everything from telehealth to the ability to predict patient health events all the way to pharmaceuticals and genomics. Amazon is also already working in the pharmacy space thanks to its 2018 acquisition of PillPack. Now called Amazon Pharmacy, the service allows consumers to order prescriptions through Amazon. And Prime members receive 2-Day shipping for their orders just as they do on normal orders.
Amazon also previously worked with Berkshire Hathaway and JPMorgan on the companies’ Haven initiative, which was meant to address the sky high cost of health care in the U.S. The companies, however, abandoned the effort in January.
Google, meanwhile, provides similar services including virtual care, health and wellness apps for providers, and health care analytics and insights. Google’s parent, Alphabet, also oversees its life sciences company Verily.
“No question...you’re seeing all big three mega clouds are going after the space in a big way,” Thill said.
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