This was the year Oracle (NASDAQ:ORCL) was finally recognized as a cloud player. When ORCL stock hit its all-time high on Dec. 6, investors were looking at a 67% year-to-date gain. Today, shares are up a little more than 40%, thanks in part to the omicron downdraft but also thanks to Oracle’s purchase of Cerner (NASDAQ:CERN) for $28.3 billion.

It’s an all-cash deal that will require Oracle to do some borrowing. At the end of November, Oracle listed about $23 billion in cash and marketable securities against $74.4 billion of non-current borrowings.

The acquisition of Cerner gives Oracle a hefty piece of the health IT market, behind only privately held Epic Systems. Oracle’s spin is that the move makes it a major player in the health cloud.

The Liar’s Cloud

Oracle was late to the cloud, which is built on open-source software and cheap, standardized chips.

Co-founder Larry Ellison, who at 77 still directs the company and is its largest shareholder, openly opposed open source. Most notoriously, Oracle bought Sun Microsystems, a major open-source sponsor in 2009. After the deal closed, Oracle sought to make Sun’s open-source tools proprietary. It even fought a decade-long battle in court with Google for Java revenues, which it lost this year before the Supreme Court.

Since embracing the cloud, however, Oracle’s fortunes have risen, as have Ellison’s. He’s now a centibillionaire, worth $122.5 billion.

Critics call Oracle’s products a “fake cloud.”  Oracle’s proprietary tools are still embedded in it. Ellison calls it an “autonomous cloud.” This has created a form of “liar’s poker” in the cloud.

As long-time analyst Matt Asay wrote recently, nearly one-third of information technology (IT) professionals say they’re “cloud native” and another 37% say they plan to be in two to three years. But only around 6% of IT spending today is on cloud services. Saying you like the savings of open-source cloud and taking full advantage of those savings are two different things.

Health Care Control

This split between what is done and what is said is especially prevalent in health care.

In theory, your health care data is yours. In practice, it belongs to the hospital group collecting it. Federal law is very strict on sharing it. This slowed cloud adoption, along with the initial cost of installing non-cloud solutions early in the 2010s.

Cerner CEO David Feinberg has been fighting this battle for years. He only joined Cerner in October. Previously, he worked at Alphabet (NASDAQ:GOOG, GOOGL), where he led Google Health.

This deal clips the company to a semi-proprietary cloud operator. Cerner has been a large customer for Amazon (NASDAQ:AMZN) Web services. Eventually, most of that revenue will move to Oracle.

Still, the deal could be huge for both Oracle and Cerner customers. Oracle will be offering those customers the protection of a proprietary operation, along with the cloud halo. Cerner’s current software is closely integrated with that of Microsoft (NASDAQ:MSFT). Oracle will now benefit from that integration.

The Bottom Line on ORCL Stock

For a cloud company, ORCL stock is still dirt cheap. Its market cap is less than 6 times fiscal 2021 revenue of $40 billion. That’s because revenue hasn’t advanced much since 2018, when it was $39.4 billion.

Cloud has yet to show itself in Oracle’s revenue because much of Oracle remains tied to old-fashioned data centers. Cerner offers instant growth, with $5.8 billion in revenue estimated for this year.  It also offers huge opportunities in the cloud-hesitant world of health care, where Amazon, Microsoft and Alphabet have seen only limited success for a decade.

Health care companies are less interested in the savings of the cloud than its flexibility. Control over data remains paramount. That’s what kept the large IT players out of health care for so long. The Oracle-Cerner deal is the first break in that dam. While it’s not as big as Oracle advertises, it’s a sign of things to come.

On the date of publication, Dana Blankenhorn held long positions in MSFT and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn.