Nuance Communications, Inc.

Nuance Communications, Inc.

Formerly	ScanSoft, Inc.
Type	Subsidiary
Industry	Software
Founded	1992 (1992) as Visioneer
Headquarters	Burlington, Massachusetts, U.S.
Key people	Chairman and CEO Mark Benjamin
Products	IVR,Natural Language Understanding,OCR, speech synthesis, speech recognition, PDF, consulting, government contracts
Number of employees	6,500+ (2021)
Parent	Microsoft
Website	www.nuance.com

Nuance Communications, Inc is a multinational software technology company that specialises in AI-powered speech recognition and Natural Language Processing(NLP) solutions that have various applications in the healthcare industry. It is a pioneer in cognitive and conversational artificial intelligence (AI) innovations. These innovations infuse intelligence into daily work and life, amplifying human intelligence to boost productivity and enhance security.

Operations

History of the company:

Originally incorporated as Visioneer in 1992, the company merged with ScanSoft, Inc. its largest competitor at the time in 1999. In 2005, ScanSoft acquired and merged with Nuance Communications, Inc and changed its name to the same. Under this name, the company had was a key player in the development of voice recognition software and speech-to-text technology. As of March 4th 2022, Nuance Communications Inc. is a subsidiary of Microsoft Corp. It is based in Burlington, Massachusetts, but it has established a significant presence in the Seattle area through various acquisitions such as Saykara, VoiceBox, Swype, and several others.

Mission of the company:

At its core, Nuance aims to use advanced conversational AI to help improve productivity, enhance customer experiences, and enable seamless human-machine interactions across various industries, including healthcare, automotive, financial services, and more. Its website states its mission statement as, "amplifying your ability to help others". According to Nuance CEO Mark Benjamin, “We are committed to innovating new and cutting-edge AI solutions that help make healthcare more personal, affordable, effective and accessible, while also continuing to improve the patient and clinician experience."

Main offerings of the company:

The company offers an array of solutions under three primary segments: Healthcare, Enterprise, and Other.

The Healthcare segment focuses on improving and simplifying clinical documentation through solutions that comprehend and analyse clinical speech and language. It provides products like Dragon Medical One, a cloud-based speech recognition solution, and Nuance Dragon Ambient eXperience (Nuance DAX), an AI powered clinical documentation solution. These tools enhance clinical documentation efficiency, accuracy and accessibility.

The Enterprise segment employs speech, natural language understanding, and AI to automate customer solutions across various channels, including voice, mobile, web, and messaging. This segment delivers intelligent engagement solutions and utilises Conversational AI, Engagement AI, and Security AI to better interact with customers. Examples include virtual assistant and chatbots for enhanced customer service to achieve the best possible business outcomes.

The Other segment delivers mainly language and translation services that aren't healthcare or enterprise focused.

Serving a diverse range of industries, from healthcare and financial services to telecommunications, government, and retail, Nuance markets and sells its innovative solutions directly and through an extensive network of resellers. These resellers encompass system integrators, independent software vendors, value-added resellers, distributors, hardware vendors, telecommunications carriers, and e-commerce websites globally.

Acquisition by Microsoft

On March 4^th 2022, Microsoft Corp completed the acquisition of Nuance Communications Inc. in all cash transaction valued at $19.7 billion, inclusive of Nuance’s net debt. This is the third largest acquisition in Microsoft history after Activision-Blizzard and LinkedIn.

Acquisition Rationale:

Microsoft's acquisition of Nuance builds upon their previous successful partnership, initially announced in 2019. By integrating Nuance's solutions into the Microsoft Cloud for Healthcare and leveraging Nuance's expertise and relationships with EHR systems providers, Microsoft aims to enhance healthcare providers' capabilities through ambient clinical intelligence and other cloud services. This acquisition is expected to expand Microsoft's total addressable market (TAM) in the healthcare provider domain, effectively increasing it to almost $500 billion which is almost double in size. Nuance's expertise in AI and customer engagement also extends beyond healthcare, which will benefit Microsoft in providing advanced solutions to other industries as well. The acquisition aligns with Microsoft's strategy to focus on specialised cloud services for different sectors.

According to Microsoft CEO, Satya Nadella, "Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI.” “AI is technology’s most important priority, and healthcare is its most urgent application. 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."

How is this acquisition beneficial for both Microsoft and Nuance?

On the whole, acquiring Nuance is extremely beneficial for both parties. In the long term, Microsoft will acquire Nuance's technology, staff and skills, clients and IP(intellectual property). Stu Patterson, ex-CEO, SpeechWorks, told the Boston Globe that Nuance: “… has more intellectual property around speech than anybody on earth.”   The biggest benefits for Microsoft are however expansion in the healthcare market and strengthening Industry-Specific Cloud Strategy.

For Nuance, on the other hand, this acquisition gives it access to a much larger market due to Microsoft's vast customer base and global reach as well as more financial strength and stability. This can fuel further innovation, research, and development of cutting-edge products and services.

Also, by integrating Nuance's conversational AI and healthcare solutions into Microsoft's product portfolio, there are opportunities to create synergies and cross-selling between Nuance's offerings and Microsoft's existing suite of products. These synergies could include complementary product offerings, streamlined operations and cross-selling opportunities among others.

Leadership

Executive Team:

Chief Executive Officer - Mark Benjamin

Mark Benjamin joined Nuance in April 2018 as the CEO and a director. He has extensive experience in the technology industry, with a successful track record in driving growth initiatives related to cloud, SaaS, mobile, big data, and IoT solutions. Before joining Nuance, Mark held the position of president and chief operating officer at NCR Corporation. There, he was responsible for overseeing sales, solutions management, business and product development, services, and supply chain operations. Mark holds a bachelor's degree in international finance and marketing from the University of Miami.

Chief Technology Officer - Joe Petro

In September 2018, Joe Petro assumed the position of Executive Vice President and Chief Technology Officer. In this capacity, he is responsible for supervising research, platform development, application development, dev ops, and cloud readiness for the company. Joe joined Nuance in 2008 as the Senior Vice President of Healthcare Research and Development. He holds a Bachelor of Science degree in mechanical engineering from the University of New Hampshire and a Master of Science degree in mechanical engineering from Kettering University.

Chief Financial Officer - Dan Tempesta

Dan Tempesta has been serving as the Executive Vice President and Chief Financial Officer of Nuance since July 2015. In this role, he is responsible for overseeing all financial and accounting operations, as well as tax, treasury, investor relations, order management, and procurement. He joined Nuance in 2008 and has held various senior finance positions, including Chief Accounting Officer and Senior Vice President of Finance. Dan holds a degree in Business Administration and Accounting from the Isenberg School of Management at the University of Massachusetts Amherst.

Chief Strategy Officer - Peter Durlach

As the head of corporate strategy, Peter's primary responsibility is to advance Nuance's overall strategic direction and portfolio, aligning with emerging trends in key vertical markets such as healthcare, financial services, telecommunications, retail, and government. Additionally, he oversees the development of disruptive AI-powered solutions through new strategic innovations. He holds a BS in business administration from the University of Vermont.

Other people of importance:

Chief Executive Officer of Microsoft- Satya Nadella

Satya Nadella is the Chairman and CEO of Microsoft. He assumed the role of CEO in February 2014. He joined Microsoft in 1992 and prior to becoming CEO, Nadella served as the Executive Vice President of Microsoft's Cloud and Enterprise group. During this tenure, he successfully led the company's transition to cloud-based infrastructure and services. He completed his undergraduate studies in electrical engineering at Mangalore University, followed by a master's degree in computer science from the University of Wisconsin - Milwaukee and an MBA from the University of Chicago.

Microsoft Cloud + AI Executive Vice President - Scott Guthrie

As the Executive Vice President of the Microsoft Cloud + AI Group, Scott Guthrie oversees Microsoft's cloud computing infrastructure, artificial intelligence platform, and the development of industry-specific cloud solutions. This includes managing products and services like Microsoft Azure (the global cloud computing platform) and Microsoft Business Applications . Additionally, he is responsible for a range of developer tools such as Visual Studio, Visual Studio Code, and GitHub, along with core commerce capabilities, infrastructure, and compliance solutions across the Microsoft Cloud. The recent acquisition of Nuance Communications adds expertise to the company's expanding portfolio.

How does leadership change after the acquisition?

As part of Microsoft, Mark Benjamin will still remain CEO of Nuance and will report to Guthrie. This arrangement follows a similar model employed by Microsoft with LinkedIn, where acquired companies maintain a level of autonomy and independence within the Microsoft structure.