FollowGerman company Siemens is widely known in more than one business categories. Siemens covers areas ranging from transport technology and telecommunication to fire alarms and water treatment systems. The German giant is involved in medical technology as well. But now it plans to partially withdraw from the field by selling its hospital information system business, because it feels it cannot match the competitors. Cerner acquires medical information systems from Siemens as the German company will move its attention to other businesses.
The move will allow Siemens to focus on other areas and work on building competitive advantages against General Motors and ABB, according to CEO Joe Kaeser. Bloomberg says according to sources that Siemens will focus on energy and industrial business focusing on “electrification, digitalization and automation.” Siemens sold other medically related business too in the recent period.
Cerner acquires medical information systems from Siemens for $1.3 in cash. The business brought Siemens annually around $1.2 billion in sales. About 5000 client facilities were served by Siemens in more than 40 countries, Reuters reports. After the deal is completed, Cerner will have a total of 20.000 associates in over 30 countries and 18.000 facilities. Cerner is the fourth largest provider of medical information systems in the U.S. The company faces competitors like Epic Systems, Athena Health, AllScript, NantHealth, and Flatiron Health.
The number of workers without a bachelor degree in the healthcare system increases, according to a recent report. The improvements brought by Cerner systems might produce technological unemployment at one point, so that is going to provoke another relevant debate.
Cerner acquires medical information systems from Siemens to face tightening competition
“We think scale is important,” says Cerner’s CEO, Neal Patterson. “We were the largest IT company, but this gets us a bigger, better business platform. We’ll have a combined $650 million [in research and development] spend and we think the future of healthcare computing is driven around the ability to innovate. This kind of preserves our ability to spend heavily in innovation and IT certainly for the rest of this decade.”
By adding Siemens hospital information system to the group, Cerner will now produce a revenue of $4.5 billion per year. Siemens remains in the medical field by focusing on medical equipment. Besides the acquisition agreement, the two companies decided to enter a strategic alliance. Each company will contribute with $50 million to improve the integration of medical technologies in health IT systems.
Cerner acquires medical information systems from Siemens, a process to be completed in the first quarter of 2015.
