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Microsoft (MSFT) to Support CVS Health's Digital Transformation

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Microsoft (MSFT - Free Report) is teaming up with CVS Health (CVS - Free Report) to help the latter ramp up its digital transformation endeavours. This will help CVS health to provide a data-oriented and personal customer experience along with greater compliance with the company’s own patient confidentiality rules, added Microsoft.

CVS Health has chosen Microsoft as its “preferred cloud provider” and the companies will also work together to develop advanced solutions to enhance customer health outcomes.

The healthcare company is also looking to expand its retail loyalty and personalization programs by implementing Azure-based advanced Machine Learning models.

By extending Microsoft’s Teams App and other Office products, CVS Health aims to empower its retail personnel to cater to customers’ myriad queries and needs and enhance experience.

Dynamics 365 Guides, Microsoft HoloLens and Remote Assist will aid CVS Health workforce to make easier complex procedures, while Microsoft Azure AI and cognitive functionalities will help in the automation of administrative and predictive processes, added the software giant.

 

Headquartered in Woonsocket, RI, CVS Health is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care.

Microsoft Eyeing Larger Share of the Healthcare Sector

The pandemic is driving the digital transformation of the healthcare system. The healthcare companies are rapidly digitizing their operations to ensure business continuity and drive operational efficiencies as well as help staff to carry on work from anywhere. Combining healthcare data along with pioneering technologies like cloud, machine learning and AI will also enable clinical researchers to ramp up vaccine/drug development processes.

Per a Mordor Intelligence report, global healthcare cloud computing market is projected to witness a CAGR of 14.1% between 2021 and 2026 and reach $52.3 billion.

Microsoft is striving to gain more opportunities presented by the rapid digitalization of the healthcare industry.

In April 2021, Microsoft announced the acquisition of Nuance Communications for $19.7 billion (including Nuance’s net debt) in an all-cash deal. The acquisition is expected to increase Microsoft’s total addressable market (TAM) in the healthcare vertical to $500 billion, noted the software giant.

The acquisition has been approved by the boards of the companies. It is expected to be concluded by the end of 2021, subject to Nuance’s shareholders’ approval and other regulatory and customary conditions.

In 2020, the tech giant rolled out the Microsoft Cloud for Healthcare. The platform offers healthcare organizations with functionalities to manage vast healthcare data, attain cost efficiency as well as extend tight security and boost interoperability of health data.

Microsoft has gained significant ground in the lucrative cloud space where its Azure Cloud service has emerged as one of the dominant players. However, it needs to watch out for intense competition from Amazon (AMZN - Free Report) Amazon Web Services that continues to hold the biggest share of the global cloud market.

Per a Statista report, Amazon accounted for 32% of the global cloud infrastructure services market followed by Microsoft (21%) and Google Cloud (8%) in the third quarter of 2021.

At present, Microsoft currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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