Oracle Snags Cerner for $28.3B

Business software behemoth Oracle Corp. on Monday (Dec. 20) announced it’s buying electronic medical records company Cerner Corp. for $28.3 billion, part of Oracle co-founder Larry Ellison’s plan to move into new markets, according to a press release.

The Cerner acquisition is another example of Oracle’s quest to grab a larger share of the cloud computing space that has been long dominated by its competitors. Ellison has pointed to healthcare as one of the focus areas for Oracle in recent interviews, saying it’s “on par with banking in terms of the importance to our future.”

“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,” Ellison said Monday.

Cerner’s software packages help hospitals and doctors store and analyze medical records. The market for software that stores and analyzes medical records should reach $29.1 billion in sales this year and is projected to grow to $35.5 billion by 2025, according to Constellation Research.

Much of the projected spending on medical records storage and analysis is on in-house computer systems and is expected to migrate to the cloud in the next several years.

Oracle’s all-cash acquisition of Cerner, which still needs regulatory approval, values Cerner at $95 a share.

Related: Oracle and Cerner Deal Another Sign of Connected Healthcare via Deep Data Analytics

Even before this deal is completed, Oracle has solutions focused on healthcare-related finance and operations, insurance administration and analytics. Cerner’s Essential Clinical Datasets tool is touted to improve the use of patient data for better clinical outcomes.

Cerner appointed former Google Health chief Dr. David Feinberg as its new CEO in August. During his keynote remarks at Cerner’s annual conference in October, Feinberg said: “Usability of technology is just the beginning, not the true promise of the digital age. Fixing the EHR is our first job. The pipes are laid through 40 years of digitization, which is wonderful. But now we have to make it easier to get the right information to the right people at the right time.”