Oracle’s $28b Cerner Deal Shows Value of Health Data

One of Epic’s major EHR competitors will soon be owned by a major Silicon Valley IT corporation

CEO SUMMARY: For three decades, pathologists and clinical lab executives regularly pointed out that clinical laboratory data was extremely valuable. But it seemed nothing changed, no one listened, and labs could not monetize their lab data. Now, one of Silicon Valley’s bigger players in information technology is investing $28 billion to acquire one of the nation’s major healthcare IT companies. Will Oracle find ways to use the Cerner Millennium LIS to gather and package lab data in valuable ways?

ONE IMPORTANT WAY TO UNDERSTAND ORACLE’S INTEREST in paying $28 billion to acquire Cerner Corporation is the general recognition that control of healthcare data will be a guaranteed path to revenue growth and profits. 

While many industry observers have focused on Cerner’s cloud-based electronic health record (EHR) business as Oracle scoops up the company, Cerner is also a long-time player in the laboratory information systems (LIS) market. This is important because clinical laboratories are producing ever-growing volumes of genetic data and lab test results. 

Footprint in Healthcare 

Research firm Forrester pegged business segments that support clinical laboratory operations as a significant trend in the healthcare industry for the 2020s, and the Cerner deal fits nicely into that prediction. Beyond that, two advantages for Oracle stem from its acquisition of Cerner Corporation: a greater footprint in healthcare and a bigger market for its cloud-based products.

“Oracle currently lags behind Amazon, Microsoft, and Google in cloud market penetration overall—healthcare presents a sizable opportunity, as healthcare organizations are in the earlier phases in their migration to the cloud,” wrote Daniel Hong, Vice President and Research Director at Forrester. 

Seat at Table for Oracle? 

“According to Forrester, 40% of U.S. healthcare life sciences infrastructure pros say that their primary cloud strategy is to move existing workloads to the public cloud. The [Cerner] acquisition also gives Oracle a seat at the table alongside tech titans Amazon, Google, Apple, and Microsoft, which have entered healthcare with varying degrees of success.

“There will be ripple effects in the market from the Oracle-Cerner acquisition,” Hong continued. “The likelihood of an acquisition of Epic or another EHR vendor is a strong possibility over the next year, with tech companies looking to add more capabilities and data as they further verticalize their enterprise health clouds.” Epic is the market leader in EHRs.

However, Oracle’s acquisition of Cerner may come with an unwelcome consequence. Healthcare companies—including hospital information systems and laboratory information system companies—that use Oracle’s databases or cloud software may find themselves in an awkward position if they compete against the software systems sold by Cerner (and now owned by Oracle), said Dennis Winsten, President at Dennis Winsten and Associates, an LIS consulting firm in Tucson, Ariz.

“This aspect of the merger of the two companies will be worth watching,” Winsten explained. “There’s probably not much competing companies can do if they find themselves in this situation.”

Cerner’s LIS Sales 

In the 1990s and 2000s, Cerner gained a solid share of the LIS marketplace. However, beginning in 2011, as U.S. government incentives rolled out to encourage hospitals and doctors to implement EHR systems, Cerner naturally devoted more resources towards its health record products. As a result, investment in its LIS dropped over the years.

“When you look at the greater value of an EHR system compared to the lab information system, it’s significant,” Winsten said. “Cerner’s competitiveness in the lab world was diminished, and where it got benefit was the fact that a provider using both the Cerner EHR and LIS gained a more complete electronic health record for patients.”

Product Investments 

According to a news release, Oracle intends to continue investing in Cerner’s products. Oracle also wants to push its voice-assisted technology into Cerner’s services, which could benefit LIS users.

“Oracle’s focus on usability and voice-enabled user interfaces will dramatically reduce the amount of time that medical providers spend dealing with systems and increase the time they spend directly caring for patients,” Oracle said.

During the next few years, clinical laboratories using the Cerner Millenium LIS, and anatomic pathology groups using the Cerner CoPathPlus pathology LIS, may not see major changes in the service and sales teams representing these products. 

One reason for this is that these will be new product categories for the Oracle executives. It will take time for the Oracle acquisition teams to better understand all the different IT products in the Cerner portfolio. It is logical to believe that Oracle considers ownership of Cerner to be a big data play in healthcare because a hospital or health system that is “all-Cerner” can deliver a large volume of valuable patient health data.

Contact Dennis Winsten at 520-331-4656 or

At-a-Glance: Oracle, Cerner Corp

THIS OVERVIEWprovides a brief look at Oracle and Cerner. 



    • CEO: Safra Catz
    • Founded: 1977
    • Industry: Technology
    • Revenue: $40 billion in FY 2021
    • Core products: Cloud-based software and infrastructure
    • Market reach: Sells to 430,000 customers in 175 countries



    • CEO: David Feinberg, MD
    • Founded: 1979
    • Industry: Health IT
    • Revenue: $5.5 billion in FY 2020
    • Core products: Electronic health records (EHR) system, laboratory information system 
    • Market reach: Has 25% of the hospital EHR market

Sources: Cerner, Oracle, Health Leaders Media



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