Nadella’s acquisitions: How Nuance stacks up
Microsoft has purchased practically 80 corporations since Satya Nadella took over as CEO in early 2014. And it is rumored to have tried and to be attempting to accumulate much more (hi there TikTok, Pinterest, Discord, and so on.). On April 12, Microsoft made its second largest acquisition in company historical past by shopping for Nuance Communications, a conversational AI vendor, for $19.7 billion. Past dimension, how does this buy stack up towards different Nadella acquisitions?
It appears simple to make a case that Nuance is an nearly pure match for Microsoft. Nuance’s historical past is anchored in voice expertise, however this acquisition is not about attempting to make Cortana a Siri or Alexa voice assistant contender (once more). Microsoft and Nuance have been companions for the previous few years and labored collectively on Nuance’s newest marquee product, known as Dragon Ambient Expertise (DAX). Each corporations are cloud-first and enterprise first. Nuance nonetheless sells some “boxed” software program, like Microsoft does, nevertheless it’s attempting emigrate its clients to providers as quick because it virtually can.
With LinkedIn and GitHub, Microsoft officers emphasised that they deliberate to let each of these acquisitions largely function as unbiased entities even after Microsoft took them over. Equally, Microsoft has downplayed its position as proprietor of its Metaswitch and Affirmed Networks acquisitions by nearly hiding its parental standing on their web pages, weblog posts and press releases, referring to every in small print as “A Microsoft Firm.”
However there have been no mentions of any sort of self-governance plans in any respect in Microsoft’s press launch in regards to the Nuance acquisition or on the decision Microsoft held with analysts right now to elucidate the deal. Possibly that is as a result of Nuance’s cloud-first providers dovetail properly and understandably with Microsoft’s personal Azure, Azure AI, Dynamics 365 and Microsoft 365 providers? And integration of Nuance and Microsoft providers and workforces are important to boosting Microsoft’s cloud and AI companies? Or possibly 20-plus-year-old East Coast corporations do not want these sorts of concessions (says this no-nonsense East Coaster).
When Microsoft made its greatest acquisition ever — LinkedIn for $26.2 billion in 2016 — I bear in mind quite a lot of analysts scratching their heads attempting to grasp the deal. (On the LinkedIn name, Microsoft took plenty of analyst questions; on the Nuance name, there was not a query and reply part — possibly as a result of none was actually wanted.) In making the case for the LinkedIn deal, Microsoft officers repeated that LinkedIn’s knowledge graph and Microsoft’s knowledge graph could be built-in. Thus far, there’s been comparatively little of that between the 2 corporations and LinkedIn largely continues to run as a separate enterprise social community.
Nuance has honed its focus prior to now months in order that two-thirds of its enterprise comes from healthcare and the remaining third from the enterprise. Its DAX service information doctor-patient conversations; turns the recording into context-aware notes; and incorporates these notes in a means that preserves safety, compliance and privateness, into medical workflows that may be augmented by companions. In brief, Nuance is all about productiveness providers. Seems like … Microsoft.
And despite the fact that Microsoft is actually taking part in up the expansion potential within the profitable healthcare vertical with the Nuance buy, DAX may be utilized past healthcare, as Microsoft Govt Vice President of Cloud + AI Scott Guthrie informed analysts on the Nuance name. “Practically any skilled service may gain advantage” from the record-transcribe-contextualize productiveness loop that DAX supplies.
Since Nadella grew to become CEO, Microsoft has made many, comparatively smaller, focused acquisitions meant to bolster its AI, cloud, developer and safety choices. Microsoft has made just a few greater acquisitions since he grew to become CEO, akin to Mojang/Minecraft; Xamarin; and lately, ZeniMax Media/Bethesda. Below Nadella up to now, there actually have not been any main Microsoft acquisitions that appeared actually out-of-character (apart from LinkedIn and initially, Mojang, some would possibly argue). I can see how Microsoft might construct a robust case round a Discord acquisition, given how rooted Discord is in gaming. But when Microsoft finally ends up shopping for one other shopper/creator “group” alongside the traces of Pinterest or TikTok, Nadella’s report for primarily sensible — reasonably than aspirational — acquisitions might not be as pristine.
Microsoft has lots of money and appears able to spend it. I am curious if it should proceed alongside the small and wise enterprise acquisition route or attempt a Hail-Mary shopper play exterior of its gaming vertical….