Oracle joins Microsoft in high cost direct control of healthcare - TechCrunch

1640162169 Oracle joins Microsoft in high cost direct control of healthcare


    Oracle betting is based on its cloud business

    Enterprise software companies suddenly focused strongly on health care. If you want proof, check out how Oracle and Microsoft backed up trucks full of money to buy health tech companies this year.

    I am currently compiling the top 10 M&A deals of the year, and the top two deals today are a $ 28.3 billion deal with Oracle to buy the Cerner contract and $ 19.7 billion Microsoft to Nuance Communications buy in April. That comes to just under $ 50 billion for two health - related companies.

    Other majors are circulating the health market. Amazon has been quieter about it, but over the past year, it has also been looking at healthcare, with partnerships, hiring and programs heavily focused on the side. direct profit. Google's approach was less certain, as its vertical healthcare director, David Feinberg, jumped in October to Cerner, the company that bought Oracle this morning.

    There is a lot of interest because healthcare is a huge market. In its news, a popular figure, Oracle said, the U.S. healthcare industry alone is worth $ 3.8 trillion annually. When you take that figure out to the whole world, it's no surprise that big companies are willing to make a big bet to get a piece of it.

    But beyond the obvious market capabilities, what is Oracle getting for its money? We spoke to some industry experts to catch them.

    Let’s start with some numbers. In its most recent earnings report, Cerner posted revenue of $ 1.47 billion in the third quarter, a modest average growth of 7% per year. So the company was not just growing in leaps and bounds, making it a good takeover target. If you estimate that Cerner was at a $ 6 billion run rate, that's worth less than 5x revenue, which is kind of the middle ground these days.

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