Last week, Oracle Corporation reported its 2023 Q4 and full-year results, indicating blockbuster revenue growth and profits. The company reported that for fiscal year 2023, total revenues were up 18% to nearly $50.0 billion. Specifically, Cloud services and license support revenues were up 17% to $35.3 billion.
Indeed, this is an impressive performance by the Austin based technology titan. Safra Catz, CEO of Oracle, explained: “Annual revenue growth was led by our cloud applications and infrastructure businesses which grew at a combined rate of 50% in constant currency.”
Founder, CTO, and Chairman of the company, Larry Ellison, also stated that companies innovating in the generative AI space, such as NVIDIA, are heavily investing and using Oracle’s Gen2 Cloud, a key driver of the company’s success.
In contrast, however, Oracle’s healthcare business seems to be undergoing some changes. Though the earnings report indicated that Cerner contributed nearly $5.9 billion to total revenues for fiscal year 2023, external sources indicate that the company announced position cuts and layoffs this week, citing that significant work still needs to be done with the Cerner unit to improve margins. Per the article, Catz explains regarding Cerner’s value capture: “I’d say we’re at the beginning-ish, sort of at the beginning of the middle at most. We’ve got a long way to go on just operationally and we’ve got a lot of work going on the development side as we bring our technical capabilities into the product and move them into the Oracle Cloud…There are a lot of savings as we do that also.”
Oracle announced its acquisition of Cerner Corporation for nearly $28 billion in December 2021, taking a bold step into clinical medicine. Cerner is one of the largest electronic health record (EHR) companies and is widely used across the industry.
Oracle’s plans with this acquisition were to innovate in the highly competitive healthcare technology space, which has long craved attention and disruption. Specifically, EHR systems, data interoperability, and information exchange systems in healthcare notoriously require a lot of work. With Oracle’s incredible presence and prowess in the Cloud space, its attempt to streamline and make healthcare data systems more efficient makes sense. It also aligns with similar aspirations that other tech titans have expressed to innovate in this space. Take for example Google Cloud’s Healthcare Data Engine product; the company’s ambitious goal with this is to “Generate a longitudinal patient record across siloed data in near real time to power your applications, analytics, and AI.”
Oracle can undoubtedly create lasting and meaningful impact with Cerner, given enough time. Unfortunately, healthcare, by the very nature of it, is a very challenging industry. Thus, there will likely be more turbulence ahead for the company with regards to this acquisition. However, if past successes are indeed any indication of future outcomes, Oracle’s commitment to improving healthcare is indeed promising for a better future ahead.
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