Microsoft announced Monday it will spend $19.7 billion to acquire Nuance Communications, which makes a "conversational AI and ambient intelligence" platform — a grouping of voice and digital communication services.
The company has a strong foothold as an enterprise AI provider for the healthcare space, present in 77% of U.S. hospitals. Nuance's expertise in the interactive voice response (IVR), virtual assistants and digital and biometric solutions will "come together with the breadth and depth of Microsoft's cloud, including Azure, Teams, and Dynamics 365," according to the announcement.
The deal signals continued interest from Microsoft into how AI-enabled voice can augment its existing solutions. The acquisition also brings to the forefront a bigger question about where voice and speech-to-text capabilities fit in the enterprise tool kit, particularly in the collaboration space.
Microsoft bringing Nuance into the cloud and AI part of the organization shows Microsoft is likely looking at expanding these capabilities into other industries, according to Sridhar Karimanal, head of the Health and Life Sciences group at Eagle Hill Consulting. That said, the company already had some pieces of voice-assisted work and speech-to-text within its existing tool kit.
Microsoft has invested in developing and training speech-to-text capabilities inside Microsoft 365. In keeping with a trend in the collaboration space, also enabled live meeting captions within Microsoft Teams.
Chris Stafford, managing director in M&A at West Monroe, breaks down the speech-to-text market in three buckets:
The self-serve platforms, comprised of big tech companies such as Microsoft, Google, AWS and IBM. "These are really the broad tech platforms that are building developer services and integrations with their different products."
The platform players, which is where Nuance sits, are the "SaaS products that truly have speech-to-text capabilities and their core competency is building these types of tools, integrating with things like Microsoft products or EHR platforms."
The third piece of space is related to customer engagement, tools that service customer support platforms, which have "a big need for voice-to-text, voice recording and transcription capabilities."
"Nuance brings speech-to-text technology that Microsoft has as well, but strength in domain capabilities so [it's] very strong in very specific applications," Nicholas McQuire, Chief of Research, Enterprise at CCS Insight. "That has always been a difficult bridge for Microsoft, to take its generic, almost horizontal, speech technology and then customize it or have companies apply it into their business."
Where speech-to-text fits
Technologies often inch their way from consumer adoption into the enterprise tool set. If a device or capability has broad adoption in workers' personal lives, those features face less friction as they pop-up into the daily workflow.
It's a natural next step for voice to expand its reach in the enterprise tool kit, according to Stafford.
"I wouldn't be surprised if we start to see that more frequently in what we're using day-to-day and in Teams, Slack and some of these other collaboration tools," said Stafford.
Exactly where Microsoft Teams and Nuance's technology align remains to be seen, according to McQuire. But one potential application of speech-to-text capabilities is in the customer service space, where companies can have AI "running in the background," offering agents information, translating sentiment and offering guidance.
Adoption of tools that can provide meeting notes and conversations with employees are going to "grow more and more, and we're starting to see more and more demand for transcription speech-to-text," said McQuire.
What comes next for speech-to-text brings another layer of complexity along, according to Craig Walker, founder and CEO at Dialpad, an AI-powered cloud communications platform.
"We'll soon be at a place where transcripts will evolve from being a simple record of what was said to an actionable resource that can offer clear actions, identify potential team challenges through sentiment and even unify communication silos with applications like a CRM or ticket system," said Walker in an email.
Simplifying interactions with the support of speech-to-text might also help allay concerns around messaging overload, a barrier that existing collaboration tools are targeting as an obstacle toward further adoption.