Amazon May Soon Announce Major Cloud Deal With Cerner

Posted on November 27, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

As I’ve previously noted, Amazon is making increasingly aggressive moves into the healthcare space of late. While it hasn’t been terribly public with its plans—and why should it, honestly?— there been some talk of its going into the healthcare technology space. There’s also much talk about angles from which Amazon could attack healthcare sectors, including its well-publicized interest in the pharmacy business.

Though interesting, all of this has been vaguely defined it best. However, a new deal may be in the works which could have a very concrete effect. It could change not only the future of Amazon’s healthcare industry efforts but also, potentially, have an impact on the entire health IT world.

Think I’m exaggerating? Check this out. According to a story on the CNBC site, Amazon is about to announce a “huge” deal with Cerner under which the two will work together on building a major presence in enterprise health IT for Amazon Web Services. Put that way, this sounds a bit hyperbolic, but let me lay this out a bit further.

As things stand, the online retailer’s Amazon Web Services is already generating almost $20 billion a year, boasting clients across major industries such as technology, energy and financial services. Its only stumbling point to date is that it’s had trouble cracking the healthcare market.

Apparently, at the re:Invent conference in Las Vegas next week, AWS’s CEO will announce that Amazon is teaming up with Cerner to convince senior healthcare leaders to use AWS for key initiatives like population health management.

Sources who spoke to CNBC that the partnership will initially focus on Cerner’s HealtheIntent population health product, presumably as a door into convincing hospitals shift more of the cloud-based business to AWS.

Now why, you ask, is this deal bigger than the average bear?  is it one of those vaporware partnerships that fly a flag and promise a lot but don’t really go anywhere?

Yes, I admit that’s always possible, but in this case, I don’t think it’s going to turn out that way. The fit simply seems to work too well for this to be one of those much-ballyhooed deals that fade away quietly. (In fact, I could visualize a Cerner/Amazon merger in the future, as crazy as that might sound. It’s certainly less risky than the Whole Foods deal.)

For one thing, both Amazon and Cerner have significant benefits they can realize. For example, as the story notes, Amazon hasn’t gotten far in the healthcare market, and given its talent for doing the impossible, it must be really stuck at this point. Cerner, meanwhile, will never pull together the kind of cloud options AWS can offer, and I doubt Epic could either, which gives Cerner a boost in the always next-and-neck competition with its top rival.

If this agreement goes through, the ripples could be felt throughout the healthcare industry, if for no other reason than the impact it will have on the enterprise EHR market. This one should be fun to watch. I’m pulling out the popcorn.