Two years ago, Oracle Corp. made a massive $28 billion investment to acquire electronic-records company Cerner Corp., promising a revolution in health care technology. However, the journey has been far from smooth.
The acquisition was aimed at fixing many of the health care industry’s complex issues by modernizing dated systems and creating a major growth engine for Oracle’s earnings. However, the reality has been different. Oracle has lost at least a dozen of Cerner’s large clients and the bold product ideas have taken a backseat to the work of upgrading legacy systems.
The process of moving customers to the cloud has been more challenging than anticipated, with Oracle engineers surprised by the amount of effort required to implement changes. Financial documents reveal that sales from the division including Cerner, now branded as Oracle Health, are expected to decline in the current fiscal year and stay flat the following year.
The company has also had to cut thousands of workers in an effort to boost profit, and Oracle is saddled with billions of dollars in debt from the deal. Despite these challenges, Oracle remains optimistic about the future of Cerner and its potential to transform the health care industry.
While Oracle has made some progress overseas, its prediction that Cerner would help Oracle woo massive health-industry customers has so far failed to become reality in the US. Existing clients say they have seen little improvement in the software, which has long been plagued by technical glitches such as difficult integration between products.
Read more: finance.yahoo.com