Oracle buys Cerner in $28bn industry play

Oracle has announced the acquisition of Cerner Corporation for approximately $28.3bn. The all-cash deal will give a serious boost to Oracle’s aspirations to lead in the vertical cloud battleground – with healthcare and health services being their number one priority.

Cerner is a leading provider of digital information systems used within hospitals and health systems to enable medical professionals to deliver better healthcare to individual patients and communities.

Larry Ellison, chairman and founder at Oracle, said: “Working together, Cerner and Oracle have the capacity to transform healthcare delivery by providing medical professionals with better information – enabling them to make better treatment decisions resulting in better patient outcomes. “With this acquisition, Oracle’s corporate mission expands to assume the responsibility to provide our overworked medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-free voice interface to secure cloud applications. This new generation of medical information systems promises to lower the administrative workload burdening our medical professionals, improve patient privacy and outcomes, and lower overall healthcare costs.”

Safra Catz, Oracle CEO also commented: “We expect this acquisition to be immediately accretive to Oracle’s earnings on a non-GAAP basis in the first full fiscal year after closing – and contribute substantially more to earnings in the second fiscal year and thereafter. Healthcare is the largest and most important vertical market in the world – $3.8 trillion last year in the United States alone. Oracle’s revenue growth rate has already been increasing this year – Cerner will be a huge additional revenue growth engine for years to come as we expand its business into many more countries throughout the world. That’s exactly the growth strategy we adopted when we bought NetSuite – except the Cerner revenue opportunity is even larger.”

Oracle will leverage its autonomous database, low-code dev tools and digital assistant capabilities to rapidly expand and modernise Cerner’s systems and move them to the Oracle Gen2 Cloud. Oracle says that this process will be completed in short order as Cerner already runs most of its systems on Oracle databases. The big change will come in the form of hands-free user interfaces for Cerner’s clinical systems meaning medical professionals will spend less time typing on keyboards and more time caring for patients.

This acquisition is further testament – if any were needed – of the red hot industry clouds battleground. All software and tech vendors are making increasingly bold plays in order to showcase their vertical capabilities. Unlike other shallower assertions where deep vertical capability is little more than vapourware – Oracle has spent big to back up its claims. Investing nearly $30bn in healthcare is likely to be just the first of many similar acquisitions in 2022. ERP Today is predicting big moves for software vendors and hyperscalers as they look to deepen their reach into vertical markets and provide ‘direct to consumer’ capabilities.

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