On Monday, Oracle said it had agreed to pay $28.3 billion for Cerner, a large electronic health records vendor. The largest ever acquisition by a database giant is a sign that technology companies see health care as a growth opportunity.
The merger with the deep-pocketed owner of Cerner is a deal that is worth a lot to the company at a time when the market for digital patient records is changing.
According to KLAS Research, which tracks the health care industry, Cerner will have 25 percent of the market in 2020. The research group reported this year that the market was slipping and that the company was gaining.
Cloud-computing technology is being used in the digital patient record market. Analysts say that Microsoft and Oracle see the huge health care market as a way to strengthen their positions in the cloud business, in which customers typically pay on a pay-for-use basis.
Amazon has the largest cloud business. In April, Microsoft agreed to pay $19.7 billion for Nuance Communications, the leader in voice-recognition software used in hospitals, clinics and doctors' offices.
The cloud has made strides in the past few years, but it was slow to move its database and enterprise applications to the cloud.
The deal is a striking step by the new chief executive of the company. Dr. Feinberg was the head of the health technology unit at Google. He did not start his job at Cerner until October.
Dr. Feinberg said that combining with Oracle would give Cerner an unprecedented opportunity to accelerate work modernizing electronic health records, improve the experience for physicians and nurses, and care for patients.
The Wall Street Journal reported last week on the negotiations between the two companies.
The shift to electronic health records is seen as a necessity to move medicine into the digital age, which should increase efficiency, curb costs and deliver better care.
The transition over a decade has been difficult. According to a study by the Mayo Clinic, doctors and nurses spend an average of one to two hours on desk work every hour they see patients.
Voice recognition and automated transcription can greatly reduce the time spent typing up patient information and physician notes.
In explaining the deal, executives from Oracle pointed to its cloud and voice assistant technology as assets that should help the company improve.
The health care technology market is a mammoth, if fragmented, one. IBM and Google have stumbled in health care in recent years.
The company has a presence in clinics and hospitals. The future of enterprise software will be able to engage with industry segments, according to an analyst. The health care business is a key part of the business.
The merger could combine the data that Cerner gathers in its digital records with the data analysis and artificial intelligence tools of Oracle to spot patterns and make predictions about effective treatments.
In the digital patient record business, Cerner had another appeal. Its records are built on the database of the largest supplier. They run on a database.
The only logical match was between Cerner and Oracle.
