[ad_1]
Oracle said Monday it has agreed to pay $28.3 billion. Cerner, a major vendor of electronic health records. The deal is the largest ever acquisition by database giant Oracle, and a sign that some major tech companies see healthcare as a growth opportunity.
For Cerner, the deal is not just a payday, but a merger with a multi-pocket owner at a time of increasing competition in the market for digital patient records and changing technology.
Cerner is number 2 in the electronic health record business, with 25 percent of the market in 2020, according to KLAS Research, which monitors the healthcare industry. Cerner slipped slightly, with Epic winning 31 percent of the market, the research group reported this year.
Like most industries, the digital patient record market is adopting cloud computing technology. Analysts say both Microsoft and Oracle see the huge healthcare market as a way to strengthen their position in the cloud business, where customers leverage remote data centers and often pay for use on a pay-for-use basis.
Microsoft has the second largest cloud business after Amazon. In April, Microsoft agreed to pay $19.7 billion for Nuance Communications, a leader in voice recognition software used in hospitals, clinics, and doctor’s offices.
Oracle has been slow to move its database and enterprise applications to the cloud, but has made progress over the past few years.
For Cerner, the deal was for its new CEO, Dr. A stunning step forward by David Feinberg. Dr. Feinberg joined Cerner from Google where he headed the healthcare technology unit. His move to Cerner was announced in August but didn’t start work until October.
Dr. Feinberg said in a statement that the merger with Oracle will give Cerner “an unprecedented opportunity to accelerate our work to modernize electronic health records”, improve the experience for doctors and nurses, and care for patients.
Negotiations over a settlement between Oracle and Cerner were reported by The Wall Street Journal last week.
Electronic health records are seen as a necessity to move medicine into the digital age – a transition that will increase efficiency, reduce costs and deliver better care in the long run.
But for more than a decade, the transition has been difficult, costly and time-consuming. Most doctors and nurses now use digital records, but they work at a desk for an average of one to two hours for every hour they spend seeing patients, according to a study by the Mayo Clinic cited by Oracle.
Voice recognition and automatic transcription have the potential to significantly reduce the time spent typing patient information and doctor notes.
In announcing the deal, Oracle executives highlighted the cloud as well as voice assistant technology as assets that should help Cerner improve its offerings.
Acquiring Cerner gives Oracle a leading technology company in healthcare, a mammoth market, though fragmented. Other tech giants, including IBM and Google, have stumbled upon healthcare in recent years.
But Cerner is an established presence in clinics and hospitals. “The future of enterprise software is being able to connect with industry segments,” said Bob Parker, an analyst at IDC. “And that makes Oracle an important part of the healthcare industry.”
The merger also has the potential to identify patterns and make predictions about effective treatments by combining the data Cerner collects in its digital records with Oracle’s data analysis and artificial intelligence tools.
In the digital patient registry business, Cerner had another appeal for Oracle. Their records are built on top of the Oracle database, unlike records from other major vendors like Epic. They work on a special medical database called a cache.
“Cerner was really the only logical match for Oracle,” said Mr. Parker.
[ad_2]
Source link