Microsoft has confirmed in a blog post that the company is buying SwiftKey, the London-based iPhone and Android keyboard, and will absorb its 150 person team into the company.
The deal, which was first reported by The Financial Times, is worth around $250 million (£175 million) and follows a string of other acquisitions by Microsoft that focus on Android or iPhone-only apps, such as Sunrise, a calendar app.
According to Microsoft, “this acquisition is a great example of [the company’s] commitment to bringing its software and services to all platforms.” The company will look to integrate SwiftKey’s “core technology across the breadth of our product and services portfolio.”
Here are the reasons Microsoft may have bought SwiftKey:
SwiftKey makes big use of artificial intelligence and has, according to the founders, saved an estimated 10 trillion keystrokes by making predictions about upcoming words. (SwiftKey says that’s around 100,000 years saved.)
Microsoft has been making a big play in artificial intelligence, making a host of apps itself and buying others that have big AI components. Microsoft Research, the 1,000-strong arm of the company that focuses on scientific research, has predicted that AI will be a big trend of 2016.
Microsoft says it will absorb the entire SwiftKey team, some of whom will work on Microsoft Research projects.
By buying SwiftKey, Microsoft is getting a host of AI knowledge from the 150-strong team that it can include in its own technology, as the blog post makes clear.
Microsoft has also been buying up other iPhone and Android-only apps, such as Wunderlist, the to-do app, Sunrise, a calendar app, and Accompli, the email app that works with Outlook.
The key technology of many of these acquisitions has been incorporated into Microsoft’s services, such as Outlook, and gets the company a bigger foothold on competing platforms. SwiftKey has over 300 million users and is not available on Windows Phone.
This is increasingly important as Windows Phone continues to decline. The Lumia handset business sold just 4.5 million units in the three months leading up to January while Apple sold 75 million phones.
Microsoft has recently been working on a version of its own keyboard, called Word Flow, for the iPhone. However, the keyboard is not available to all iPhone users and buying SwiftKey could the replace Word Flow project.
Interestingly, Word Flow won a Guinness World Record for being one of the fastest keyboards for typing in 2014, something SwiftKey focused on its announcement of the acquisition by Microsoft.
Buying SwiftKey gives Microsoft some good press and signals to developers, engineers, and the technology industry that the company is somewhere that people want to work.
CEO Satya Nadella has worked hard to foster an environment where workers feel treasured, promoting a new phone policy (where using an iPhone is acceptable, even for high-level executives), and easing off some of his predecessor Steve Ballmer’s harsher ideas, such as “stack ranking,” which forced managers and employees to rank each other.
It’s hard to quantitatively measure how “cool” or “desirable” Microsoft is under Nadella, but the acquisitions of several high-profile startups — such as Wunderlist — suggests the changes are working, as companies are willing to be purchased by Microsoft.
The acquisition furthers Microsoft’s artificial intelligence efforts, image, and reach on iPhone and Android, making it a good deal for the company, and it wouldn’t be unreasonable to expect more of these kind of acquisitions in the future.
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