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Are We Now in the Conversational AI Moment?

Paul Sweeney | Head of Product at Webio

This week Nuance was bought by Microsoft for $20bn. Nuance is well known as a voice technology provider particularly in healthcare but over the past few years, it has invested in artificial intelligence solutions around this core area of voice input. It has a deep patent portfolio and a cadre of highly specialised employees. Nearly 80% of US physicians use a Nuance solution as a key part of their day-to-day workflow.

When a doctor is sitting in front of a patient they want to concentrate on the individual, on taking their medical history, on understanding their life. Filling in forms, looking up administrative information and related actions are not going to change how well they are affecting medical outcomes. If a device placed between the clinician and the patient can remove this administrative overhead, or help the clinician “ramp up faster”, there is more time available for exploration, investigation, discovery.  

The pandemic has accelerated some existing trends and telehealth is one of those. One of the largest channel shifts in history has taken place in healthcare. Instead of on-premises visits, many initial consultations are now conducted over video. This provides a data-rich environment, at scale. What is said, how it is said, how you look, how you move, are all clues. Just being able to authenticate that you are who you say you are via Voiceprint and face recognition means that your data can be accessed, and a guided discovery conversation can be conducted. This means a very large healthcare industry can be digitally transformed.  

This is not a stretch or extraordinary claim because today you can get simple add-ons to your Zoom or Microsoft Teams that will very accurately transcribe your meetings. This makes all your meetings searchable. Show me all the meetings where the word “asthma” and where “this customer ID” occurs. It becomes relatively easy to search for all my to-dos from this week’s meetings in relation to this person’s asthma treatment. Having searched for this, a good conversational AI might also ask if you also want to see any lab test results for this patient. In short capturing conversations is a gateway to what can happen next. Of course, for those watching the software industry for many years, one of the questions that will inevitably arise is how we manage for customer privacy and security.  

While Conversational AI will enable many self-service conversations, across all channels, we are predominantly in the “what happens next” phase. The next phase will relate to the data that is captured in these conversations on the level of the individual, the team, and the organisation. Where Conversational AI is combined with multiple other data sources new levels of intelligent organisation could become possible.
While Microsoft’s acquisition of Nuance is definitely a bet on healthcare as an industry, it might also be the landmark investment that releases a new wave of Conversational AI across all industries.  

In summary, 
  • Nuance Microsoft is a huge bet on the importance of Conversational Data. If Microsoft was "locked out" of this key feedback loop, it would lose competitive advantage in Healthcare.
  • In the short term, this is all about healthcare. There is a huge opportunity there for anyone that can make this market work more effectively. Note, however, none of these parties is out to disrupt healthcare, or reconfigure the healthcare market.
  • Microsoft will bring huge distribution capability to this deal, both in terms of the addressable market and in terms of how it can integrate Nuance into existing Microsoft software.
  • Microsoft is driving the adoption of their azure cloud services, and AI cognitive services that sit on that cloud. This is core to everything at Microsoft.
  • Nuance is itself a roll-up of other speech technology companies so this is unlikely to be one codebase. There are also questions around how this will be integrated with Microsoft own cognitive services. This will leave short to medium term gaps for niche players to provide integrated services that "just work".
  • Microsoft has a mixed record in terms of making M&A work: it is possible that Nuance will actually not grow into a next-generation AI powerhouse, but instead, fall victim to the usual problems of being part of a trillion-dollar mother ship.
  • This deal probably illustrates that many more industries are going to now wake up to the power of conversational data, and conversational AI. The question of who wins in this new area, and why they win, is still open to debate.


How will Microsoft's Acquisition of Nuance Impact Conversational AI?

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