Oracle in Talks to Acquire Cerner

UPDATE: Oracle acquired Cerner on December 20, 2021.

The big news being reported by the Wall Street Journal is that Oracle is talking with Cerner about an acquisition.  You may remember that we previously wrote about rumors that Cerner was an acquisition target for Microsoft and Google.  While I always felt like those were a bit of a pipe dream, Oracle would be a much more natural home for Cerner.  Although, the deal is reportedly 3 times larger than any deal Oracle had done previously.

Cerner currently has a market cap of around $23 billion and the WSJ is reporting that the deal for Cerner could have Oracle paying $30 billion for the company.  Many are suggesting that this is a pretty standard premium for an acquisition like this.  Cerner’s shared jumped as much as 22% on the news while Oracle’s shares fell about 3%.

This news is quite interesting after Cerner recently appointed David Feinberg as CEO.  In some ways, this acquisition would be similar to his role at Google Health where he was leading the health division of a much larger company.  Although, Cerner has a much more established market position than Google Health.  I can’t imagine this acquisition would be quite what he wanted when he started at CEO, but I’m sure his compensation package if an acquisition does occur will ensure he doesn’t feel too bad.

From the Oracle perspective, this acquisition would offer them the opportunity to grow their cloud business and hurt some of their competitors.  Cerner had previously announced a relationship with Amazon AWS for example.  Plus, Oracle could use all the Cerner data to better train the AI solutions their creating to compete with the likes of Amazon, Google, and Microsoft.

One of the reasons I like Oracle better as an acquirer of Cerner than Microsoft and Google is Oracle has always been in the enterprise sales business.  Cerner is largely in the enterprise sales business as well and so those are a cultural match.  What does it mean for Cerner customers if Oracle completes this acquisition?  I don’t think users should expect much change.  There would be some gradual moves from things like AWS to Oracle cloud products, but I expect the majority of Cerner users won’t really see much difference post acquisition.  It would be interesting to see how an Oracle owned Cerner would approach monetizing Cerner’s data.

No doubt this would be an important acquisition in the world of EHR and health IT.  Cerner is the largest EHR available to purchase right now.  Epic and MEDITECH seem to have no intentions of selling.  Athenahealth will be available at some point, but was just acquired by private equity.  There are a number of other ambulatory EHR like athenahealth, but ambulatory EHR are quite different than Cerner.

We’ll keep an eye on the news.  What do you think of Oracle potentially acquiring Cerner?  Is this a good acquisition for them?  What would it mean for Cerner?

About the author

John Lynn

John Lynn is the Founder of HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

   

Categories