Microsoft's Nuance buy enriches call center, security products

Microsoft's willingness to spend $19.7 billion for Nuance Communications indicates its voice recognition and AI technologies could become critical components in Microsoft's call center, security and CRM offerings.

Microsoft announced the deal this week, focusing on how it can utilize Nuance's success in the healthcare industry, which accounted for more than 60% of its revenue in 2020. However, Microsoft told investors its ambitions for Nuance include advancing Azure cloud services, the Teams collaboration platform and the Dynamics 365 CRM product.

Gartner analyst Bern Elliot said he expects Microsoft to apply Nuance's AI technology as broadly as possible, given that it's the second-largest acquisition in the company's history.

"Whenever you make a purchase of this magnitude, you work everything you can," he said.

Nuance uses its AI technology today in chatbots and interactive voice response applications for call centers and customer support operations. Microsoft could use the technology to make Teams more beneficial to call centers, experts said.

Nuance AI could also make Teams more useful in the professional service industry. For example, the technology could make recommendations to a financial advisor based on a Teams video call with a client, Microsoft executive Scott Guthrie said.

"Nearly any professional service could benefit from real-time engagement, converted into material intelligence that drives actions," he said during an investor call.

Call centers use Nuance's voice authentication technology to determine a caller's identity instead of asking for personal information, such as a Social Security number. Nuance's products perform 8 billion authentications annually, Microsoft CEO Satya Nadella told investors.

"Voice biometrics is much better than what's available currently in many contact centers," Elliot said.

Constellation Research analyst Nicole France said Nuance could improve Microsoft's Dynamics 365 CRM product. For example, Microsoft could use Nuance to let salespeople dictate notes into the application, which is more efficient than typing.

"Oftentimes [when using CRM], what you'll find is something that is a fancy interface for a database," she said. "If you're interacting with a voice interface, you're going to have something that's much more contextual."

Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily News, Walpole Times, Sharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.