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

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!