Diving brief:
- Oracle plans to move its headquarters to Nashville, Tennessee, to be closer to healthcare giants.
- “It's the center of the industry that we're most concerned about, which is the healthcare sector,” Larry Ellison, president and chief technology officer, said at a news conference Tuesday. conversation with former Senator Bill Frist at an Oracle Health event.
- The technology company has significantly expanded its presence in the healthcare sector with its purchase of more than 28 billion dollars from electronic health records provider Cerner in 2022. The segment has been a recent headwind for the company, but executives say it will return to growth next year.
Dive overview:
Oracle's move would be the second time its headquarters has moved in recent years. Oracle is currently based in Austin, Texas, where it announced that it moving at the end of 2020 after decades in Silicon Valley.
The move to Nashville would place Oracle among other health care companies like HCA Healthcare, one of the nation's largest for-profit hospital operators.
Other major providers like Community Health Systems and LifePoint Health are based out of town, while Change Healthcare – the technology company currently owned by UnitedHealth recovering from a major cyberattack – is headquartered in Nashville.
The planned move comes as Cerner faces challenges. During a recent earnings conference call, CEO Safra Catz noted that the unit had been a “significant headwind” this year, but it should return to growth next year.
The company moved Cerner customers to the cloud, which executives said would save money and improve data security – although the transition from licensed purchases to cloud subscriptions means less income upfront and more liquidity arrives over time.
Oracle also maintains a difficult EHR deployment at the Department of Veterans Affairs, and he faces significant competition from market leader Epic. While Oracle has won over many smaller hospitals, it has lost market share at larger facilities, according to a June report from Klas Research.