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Report: Oracle Health Facing Challenges Modernizing Outdated Systems

Oracle has reportedly encountered obstacles in its ambitious plans for electronic medical records company Cerner, which it acquired for $28 billion in December 2021.

The company has lost several major clients since the acquisition, its focus has shifted from innovative product ideas to upgrading legacy systems, and its engineers have been taken aback by the effort required to implement changes and migrate customers to the cloud, Bloomberg reported Thursday (May 9), citing interviews with current and former employees and customers.

Oracle did not immediately reply to PYMNTS’ request for comment.

The acquisition was expected to revolutionize the health care technology industry, with Oracle aiming to modernize outdated systems and create a major growth engine for the company’s earnings, according to the report.

However, financial documents obtained by Bloomberg reveal that sales from the division including Cerner, now known as Oracle Health, are expected to decline in the current fiscal year and remain flat in the following year. Additionally, Oracle is burdened with billions of dollars in debt from the deal, the report said.

Oracle Co-Founder and Chairman Larry Ellison had predicted that the acquisition of Cerner would attract massive health-industry customers. However, this prediction has not materialized in the U.S. market, although Oracle has gained some momentum overseas, per the report.

Existing clients have reported minimal improvement in the software, according to the report. Customers have expressed the need for Oracle to address present issues rather than focusing solely on future advancements.

The health care industry has proven to be a challenging sector for technology companies, as Apple, Amazon and Alphabet have also faced setbacks in their attempts to disrupt the industry, the report said. The complexity and regulatory landscape surrounding healthcare have forced these companies to scale back their ambitions.

Despite the setbacks, Oracle remains committed to its long-term vision of modernizing health information technology and improving patient care, per the report. The company’s immediate focus is on migrating Cerner clients to its cloud infrastructure, which will facilitate easier software updates and data sharing. Oracle is also working on revamping Cerner’s applications, addressing architectural issues, and resolving thousands of bugs. The integration of artificial intelligence into its products is another priority for Oracle, as it aims to automate tasks and enhance efficiency.

While Oracle has faced challenges in the U.S. market, it has achieved success in adding clients overseas, according to the report. The company has secured agreements to run health systems for public entities in Sweden, the United Kingdom and Saudi Arabia.