Oracle (ORCL  ) announced that it was buying Cerner (CERN  ) in a $28 billion deal in what is the company's largest acquisition to date. Over the past decade, Oracle has been quite aggressive in terms of using its giant war chest and profitable businesses to grow via acquisitions. Some of its most notable acquisitions have included Slack, Moat, NetSuite, and DataFox.

One reason for this aggression is that Oracle's legacy business of enterprise software is decelerating. One major factor in this is that Oracle has missed out on the "cloud computing" boom as it underestimated its potential and impact. Many have compared this to Steve Ballmer's dismissal of the iPhone as being too expensive for most people which put Microsoft (MSFT  ) behind Apple (AAPL  ) for many years.

Another reason it stings is that an Ellison confidante and lieutenant, Marc Benioff, actually went on to start (CRM  ) and was able to capitalize on the cloud computing boom. Today, both companies have a similar market cap of $250 billion despite Oracle being founded in 1977 vs 1999 for Salesforce.

Some skeptics of Ellison's recent decisions have also panned the Cerner acquisition given the premium paid for the stock and its lack of growth given its old school business of medical records. After the deal, Oracle's stock is down by nearly 14%.

Cerner is an electronic health records company, and some see the logic behind the move as giving Oracle a presence in the health IT market. The company believes the acquisition will lead to "huge additional revenue growth engine for years to come."

In 2022, Cerner is forecast to earn about $1.1 billion, while Oracle is forecast to earn about $11 billion. So, the deal makes sense from a valuation basis as the multiples are essentially in-line between the two companies. Still, it doesn't really solve the fundamental problem for Oracle. It's a very, profitable business that is slowly losing market share and relevance. It still has time and resources to pivot to new areas for growth which was one reason for its interest in buying TikTok last year.

Two examples of tech companies in similar situations that failed to pull off the pivot are Intel (INTC  ) and Cisco (CSCO  ), while Microsoft is an example of a company that did pull of a pivot by moving to becoming a cloud and subscription software-centric company.