Microsoft announced that it will acquire Nuance for $19.7 billion. The announcement followed reports on Sunday of the imminent deal.

Nuance is a cloud and AI software provider with substantial focus on healthcare. The acquisition fits with Microsoft's efforts to acquire industry specific cloud offerings, in this case grouped around Microsoft Cloud for Healthcare. Nuance provides SaaS offerings built on Azure such as Dragon Medical One, Dragon Ambient eXperience and PowerScribe One for radiology, in use with 55 percent of physicians in the US.

The acquisition is intended to broaden Microsoft's total addressable market in healthcare to $500 billion. Beyond healthcare, Nuance offers Interactive Voice Response, virtual assistants, and biometric options.