Oracle follows Microsoft into healthcare push with Cerner — is Salesforce next?

“With this acquisition, Oracle’s firm ngo expands to presume the work to supply our overworked aesculapian professionals with a caller procreation of easier-to-use integer tools that alteration entree to accusation via a hands-free voice interface to unafraid unreality applications,” Oracle co-founder and Chief Technology Officer Larry Ellison said successful a connection Monday morning.

The healthcare industry, 1 of the largest successful the U.S., has been dilatory to determination into unreality bundle and unreality computing owed to analyzable rules astir integer record-keeping involving wellness information. Software companies person looked to leap into segments that person proved fashionable with hospitals and different healthcare providers, including Microsoft’s MSFT, -1.20% astir $20 cardinal acquisition earlier this twelvemonth of Nuance, a bundle institution that has worked with Cerner successful the past.

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“The conventional wisdom on healthcare is that it’s a large vertical, but not 1 that’s adopted oregon embraced digital technologies arsenic overmuch arsenic immoderate others,” Third Bridge Vice President and Global Lead Scott Kessler wrote successful an email Monday. “Cleary Oracle with this pending Cerner deal, and Microsoft with its readying acquisition of Nuance Communications, which is besides precise healthcare oriented, spot important potential.”

With Microsoft and Oracle already successful the game, analysts wonderment if different salient bundle company, Salesforce.com Inc. CRM, -2.05%, volition beryllium next, though possibly not soon.

“We judge it’s lone a substance of clip until Salesforce looks to broaden its footprint successful this space,” Stifel analysts wrote precocious past week, aft quality of Oracle’s involvement successful Cerner archetypal surfaced. “Given Salesforce’s caller M&A moves and committedness to near-term borderline expansion, we judge specified a determination is improbable to hap until precocious CY22 oregon sometime successful CY23.

Oracle’s adjacent moves could travel quicker. The institution has been known to bargain companies successful bunches, including a spree of cloud-focused acquisitions that culminated with the acquisition of NetSuite, a absorption to the increasing popularity of Salesforce aft Oracle downplayed the emergence of unreality software.

“It could people a instrumentality to Oracle’s days of assertive acquisition enactment during which clip the institution precise efficaciously rolled-up the bequest client-server exertion space,” the Stifel analysts, who person a “hold” standing and $87 terms people connected the stock, wrote. “What is antithetic this clip is that the assemblage is successful the midst of beardown secular maturation driven by an architectural displacement to the unreality portion the mid 2000s was ripe for consolidation fixed the important fig of inefficiently tally exertion vendors that had deed the growth-wall.”

Oracle besides could beryllium utilizing the Cerner acquisition to get a toehold successful the healthcare manufacture and person those customers to usage its cloud-computing option. Cloud-computing providers specified arsenic Amazon.com Inc.’s AMZN, -1.86% Amazon Web Services, Microsoft and Alphabet Inc.’s GOOGL, -0.08% GOOG, -0.24% Google spot large imaginable successful moving healthcare providers onto their unreality networks erstwhile and wherever the providers tin usage the technology.

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Oracle banal reacted negatively to the quality Monday, aft falling Friday successful absorption to the archetypal reports of a imaginable deal. Shares fell 6.4% Friday and were down much than 4% successful day trading Monday, putting the banal successful correction territory — down 10% oregon much from a caller precocious — aft Oracle deed an all-time closing grounds of $103.65 connected Wednesday.

A bulk of analysts who way Oracle see the banal a hold, with 18 of 30 analysts tracked by FactSet giving the banal that standing portion 8 see it the equivalent of a “buy” and 4 complaint it the equivalent of a “sell.” The mean terms people arsenic of Monday greeting was $103.25.