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Microsoft’s Acquisition of Nuance – Implications for the Voice Authentication and Security Industry

Microsoft’s entry into voice biometrics with the acquisition of Nuance seems to support our ongoing position that voice is the future for both business and consumer applications. Although Microsoft’s vision is to materially expand in the healthcare vertical, Pindrop continues to focus across verticals that are serviced by contact centers as well as connected devices by offering a robust authentication and protection portfolio with voice biometrics, and AI at the core.

Why is Microsoft investing in Voice? 

In our view, one of the central drivers for Microsoft’s rationale to pay $19.7B to acquire Nuance is to shift the trajectory of healthcare technology and how patient care is delivered. Nuance DAX solution which provides ambient clinical intelligence (ACI) and ties into Microsoft’s Teams to quickly record and transcribe secure conversations between doctors and patients, is of utmost strategic importance to Microsoft. Voice biometrics and speech recognition, powered by AI can automate healthcare workflows, improve doctor-patient interactions and improve collaboration between clinics and patients. Nuance also brings in new customers for Microsoft to further expand Azure’s presence in healthcare. In addition, Nuance provides a competitive advantage to Microsoft by differentiating the Azure platform against other cloud providers with a robust vertical-specific solution that offers more than just storage and computes. All of this is very important to MSFT, especially since some of their past ventures into the voice space (Skype, Cortana, Discord) have been less than successful. 

What should buyers of voice authentication and security consider as a result of this acquisition?

COVID-19 related disruptions have affected contact centers in the form of long wait times, growing call volumes and increased fragmentation of customer interactions across channels. Knowledge-based authentication (KBAs), passwords, and invasive out-of-band authentication processes are ineffective. Even voice biometric systems need to constantly evolve to keep pace with new fraud tactics and consumer preference for smooth and fast interactions. MSFT’s acquisition of Nuance does not change these larger trends. Buyers of voice authentication and security should continue to keep their eyes on what matters the most – a solution that is laser-focused on their specific needs.

Pindrop’s solutions are purpose-built for authentication and security. Pindrop’s deep-learning powered voice engine, Deep VoiceTM leads the industry and is constantly fine-tuned to solve wide-ranging authentication and security problems faced by contact centers. Pindrop’s risk engines, multi-factor assessment, and ability to authenticate and detect fraud on Day One are crucial for contact centers and will continue to be so irrespective of this acquisition. Pindrop also continues to lead innovation in the industry through Phoneprinting, TraceTM, and the Pindrop Consortium. In contrast, the increased pressure on Nuance to deliver on the high expectations in the healthcare market could end up deprioritizing their focus on contact centers, especially in a COVID-19 environment. Pindrop, recognizing this unique need, has doubled down on the contact center space acquiring Next Caller which provides an additional layer of authentication to an already robust portfolio. 

What does the future of Voice look like?

Voice is projected to play an outsized role in the enterprise and consumer devices. Gartner forecasts that “The IoT endpoint market is forecast to grow 15.6% from 2019 through 2024 and reach 8.6 billion units in 2024”. On the enterprise side, Gartner predicts that “By 2023, over 75% of enterprise applications will have conversational AI, with 20% being embedded into applications, up from less than 5% today”. Voice is increasingly becoming the future for personal and professional interactions. The challenge is to make the interaction easy, reduce friction, and increase protection. Pindrop’s pedigree in risk detection and history of continuous innovation in voice biometrics and multi-factor authentication makes us well suited to solve these challenges and to create a deeper trust with customers.

Questions? Pindrop can help. Contact us.

1Gartner, Market Trends: New Chips and Software Toolsets Enable IoT Endpoints With AI Functionality, 8 December 2020
2Gartner, Emerging Technologies Venture Capital Growth Insights: Natural Language Technologies, 5 February 2021