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Microsoft Vaults Further Into Health-Care Services With Closing of Nuance Deal

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(Bloomberg) -- Microsoft Corp. completed its acquisition of Nuance Communications Inc., pushing the software giant deeper into the market for health-care services and artificial intelligence.

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The $19.6 billion deal, announced last April, lets Microsoft add cloud-computing and AI offerings aimed at health-care, finance and customer-service clients. Nuance counts 77% of U.S. hospitals and 19 out of 20 of the world’s top financial institutions among its customers, which use services like voice transcription and fraud-prevention tools, Microsoft said in a blog post Friday.

Nuance Chief Executive Officer Mark Benjamin will remain head of the business, reporting to Microsoft Cloud and AI Executive Vice President Scott Guthrie.

Microsoft and cloud rivals like Amazon.com Inc.’s Amazon Web Services are increasingly tailoring services to specific industries — on top of their original approach offering computing power and storage. With Nuance, Microsoft also gets a wealth of data that will help it better train AI services.

Other tech titans are expanding in health care as well. In December, Oracle Corp. agreed to buy medical-records systems provider Cerner Corp. for about $28.3 billion.

Even as Microsoft targets more specific industries, it will rely on partners to build some of these products, Guthrie said in an interview. The company isn’t going to build every kind of software for every industry, he said.

“But having a few specialized capabilities — Nuance is clearly it for health care, as well as financial services and for customer care broadly — this is going to give us a real leg up, an edge in this space,” he said. The deal will “allow us to start conversations where we can go much deeper, much faster than any other cloud provider.”

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