Hewlett-Packard Company (HPQ)’s Data Analytics Deal With Cerner Corporation (CERN)

Along with voice-recognition technologies from Nuance Technologies which I discussed in a previous article, Cerner’s Millennium and Health Facts solutions will form the backbone for its EHR software. The software unifies patient records on a single platform to improve the efficiency of practices.

Keep an eye on IBM and Accenture
Although Hewlett-Packard Company (NYSE:HPQ) and Cerner’s partnership should prove fruitful for both companies, two other competitors to keep an eye on are International Business Machines Corp. (NYSE:IBM) and Accenture as they are both major players in the data analytics business.

IBM’s most impressive achievement in health care is Watson, the first artificial intelligence medical assistant. Watson received the training of a second-year medical student and “digested” patient records, histories, and research at the renowned Memorial Sloan-Kettering Cancer Center. Through that training, Watson became a medical assistant that could provide treatment options with varying degrees of confidence to clinicians. In other words, while companies like Cerner are accelerating data analytics to enhance EHR software, IBM is using data analytics to fuel the growth of artificial intelligence.

IBM does not report health care revenue separately from services and software, but its 3.3% decline in revenue shows that it is facing similar headwinds as HP in the global enterprise business.

Accenture Plc (NYSE:ACN), a diversified management consulting, technology, and outsourcing company, also recently expanded its footprint in health care IT by acquiring ASM Research, a provider of IT services to U.S. defense and federal health clients. The acquisition is aimed at strengthening U.S. federal health capabilities for military personnel and veterans.

Although the ASM purchase should boost Accenture’s top line in the long run, the company suffered last quarter from its broad diversification. Accenture’s revenue only edged up 0.7% from the prior-year quarter to $7.2 billion, missing the consensus estimate of $7.47 billion. Certain businesses including health care and financial services grew, but others declined and offset those gains.

A Foolish final thought
Although the world of health care IT is growing, it’s not a 100-meter dash to the finish line. The effort to modernize hospitals through faster data analytics, streamlined EHRs, ICD-10 updates, and better wireless networks will be a long, grueling marathon. Investors should expect sluggish, single-digit sales growth from most of these companies over the next few years. Long-term growth should remain positive as they secure more contracts, however.

As seen with HP and Accenture, exposure to other businesses can be a drag on stabilizing or growing their data analytics businesses. Therefore, investors who want better exposure to the growing health care IT market without the unwanted weight of slow-growth businesses should stick with dedicated health care IT companies like Cerner instead.

The article Analyzing HP’s Data Analytics Deal With Cerner originally appeared on Fool.com and is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Accenture. The Motley Fool owns shares of International Business Machines (NYSE:IBM).

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!