Oracle's leap to disrupt health care

Hi, this is Joe Williams, the new enterprise software reporter. Oracle may have figured out something other big tech companies missed when i [View in browser]( [Bloomberg]( Hi, this is Joe Williams, the new enterprise software reporter. Oracle may have figured out something other big tech companies missed when it comes to health care, but first… Today’s top tech news: - The hosts of CES [press ahead](, despite omicron’s spread - Lina Khan, head of the FTC, [aims at]( Amazon’s cloud unit - Video app Triller goes public [in a merger]( Learning from others’ mistakes For [Larry Ellison](bbg://people/profile/1491757), the $28.3 billion deal for [Cerner Corp.](bbg://securities/CERN%20US%20Equity) was 18 years in the making. In 2003, [Oracle Corp.](bbg://securities/ORCL%20US%20Equity) considered the provider of electronic medical record technology a potential acquisition target, according to a presentation shared with the board of directors at the time that was later made public as part of a legal proceeding stemming from the company’s [takeover](bbg://screens/CACX%2011496411) of PeopleSoft. The world of software has progressed leaps and bounds since then. But Ellison’s patience in [pulling the trigger on Cerner]( could prove to be the catalyst for Oracle to succeed where many of its peers have faltered. For the past decade, technology giants have tried to force their way into health care by promising, and ultimately failing, to upend a sector most would agree is badly in need of a revamp. International Business Machines Corp. floundered spectacularly with Watson, a product the company claimed would revolutionize health care by, at least initially, helping to improve cancer treatment. In reality, the tech failed to achieve more than beating contestants at Jeopardy. Amazon.com Inc. thought it could lower health care costs by teaming up with JPMorgan Chase & Co. and Berkshire Hathaway Inc., only to dissolve that effort several years later. And [Alphabet Inc.](bbg://securities/GOOGL%20US%20Equity)’s Google recently disbanded its health division after, somewhat ironically now, then head [David Feinberg](bbg://people/profile/16230488) left to lead Cerner. Now, the industry finally appears to be learning from the mistakes of the past. Alongside Oracle’s bid for Cerner, [Microsoft Corp.](bbg://securities/MSFT%20US%20Equity) paid $19.7 billion [to acquire]( Nuance Communications Inc. The deals reflect the increasingly stark reality that big tech’s innovate-at-all costs mentality doesn’t square with the slow moving nature of health care. Instead, it appears that an industry insider is necessary to help guide efforts by software titans to modernize a sector that only relatively recently progressed from paper-based record keeping. “If you look at the track record of those trying to aggressively disrupt health care, it hasn’t worked out,” said [Stephanie Davis](bbg://people/profile/16802957), a senior research analyst at SVB Leerink. “It’s very difficult to disrupt health care from the outside. Having not just a knowledge of the disconnect, but having a knowledge of why that disconnect exists, is very valuable.” It’s clear why software companies are salivating at the opportunity to deepen their presence among hospital systems, pharmaceutical manufacturers and other parts of the sector. Health care spending on cloud infrastructure and software is expected to top $15.8 billion by 2023, according to market researcher [IDC](bbg://securities/1330361D%20US%20Equity). It’s also becoming increasingly clear that sales strategies that worked well in other industries won’t cut it in health care. Compared with sectors like retail and financial services, which tend to be quicker in adopting shiny new strings of code, health care moves at a glacial pace. That’s beginning to change, but only after the likes of IBM were forced to learn the hard way. Even with a growing appetite to finally make the jump to modern applications and infrastructure, health care companies still are moving cautiously. It’s why Oracle and Microsoft’s approach of spending heavily to acquire vendors with a deep customer base in the sector makes sense -- and why the two likely have the best shot right now at “disrupting” health care, which is tech’s proverbial “White Whale” at this point. Oracle’s long waiting game for Cerner gave Ellison the leeway to watch on the sidelines while others failed. But it also allowed Oracle’s chairman and co-founder to hold out for a counterpart that would buy in to the vision ahead. When Feinberg came onboard as Cerner’s chief executive officer in October, he pitched a goal to push along the tech transformation in health care by making electronic medical records more user-friendly to the vast majority of physicians and doubling down on the role of data in decision-making. Those objectives align nearly identical with Oracle’s stated ambitions for the deal. That’s not to say it will be easy. Oracle has to prove it can effectively sell Cerner’s existing customers on the company’s products, as well as build new health care-focused applications that persuade users to upgrade. Its record on both of those fronts is mixed. The acquisition of NetSuite, for example, has been very successful, but Ellison was a key investor in that company before the deal and seemed to be priming it for years for an Oracle takeover. Conversely, one would be hard-pressed to figure out how Oracle’s $850 million purchase of digital advertising tracking company Moat in 2017 or its 2010 purchase of life sciences application provider Phase Forward is proving particularly lucrative today. Still, armed with the knowledge of where others have failed, a key ally to help execute the vision and an ingrained customer base that appears increasingly eager to modernize information technology, Oracle may have finally figured out the solution to a quandary that has long plagued the software industry -- almost certainly to the chagrin of many rivals. — [Joe Williams](mailto:jwilliams908@bloomberg.net) If you read one thing Internal company documents show Amazon [is worried]( that consumers are losing interest in the company’s digital voice assistant, Alexa. What you need to know Telecoms and the airlines have [agreed to talk]( in the hopes of settling their dispute over new 5G wireless technology. 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