By Jun Ji-hye Hyundai Motor has decided to wrap up its contract with Oracle over database management and software maintenance, the latest move to reduce its dependence on the US computer technology firm, company officials said, Thursday. The move is apparently aimed at reducing expenses in digital transformation, according to the officials.
Korea's largest automaker plans to change their contractor for the software maintenance of its database management, selecting Rimini Street as a preferred bidder Oracle Korea has so far provided Hyundai Motor with software maintenance, which refers to services providing upgrades and security patches. The company has received about 20 percent of software prices as maintenance costs from its clients, according to sources.
Rimini Street has reportedly told Hyundai Motor it is capable of offering the same services at lower rates. In March, Hyundai Motor also decided to change their database management system provider for the firm's enterprise resource planning (ERP) system from Oracle to SAP.
The decision was part of the automaker's efforts to adopt a cloud-based ERP system for the first time among car makers here. The firm plans to complete the establishment of the next-generation ERP system in 2026.
'We have changed database and software maintenance service providers to respond better to the changing environment,' a Hyundai Motor official said. 'What we need is constantly changing.
' Besides Hyundai Motor, Samsung Electronics also decided to change from Oracle to SAP, pushing to carry out the next-generation ERP project. The two conglomerates' move will likely affect other companies, sources said.
'A variety of products and services have begun to appear, meaning companies now have large variety of choice,' a source said. Following the decisions of Hyundai Motor and Samsung Electronics, concerns have grown that sales of Oracle Korea could take a hit as the computer technology company makes profits from selling products and offering software maintenance services.
An Oracle Korea official rebuffed concerns, saying the firm has been actively operating a variety of businesses. 'Currently, we focus our efforts on cloud business and plan to open a data center at the earliest possible date,' he said.
'More clients are expected to use Oracle's cloud services.' But Oracle Korea faces the hard task of resolving deteriorating labor-management relations and improving its performance amid leadership vacuum Kim Hyung-rae, who was a CEO of Oracle Korea since 2014, abruptly quit the company in March, allegedly due to his failure to manage labor-related issues and boost business performance.
Sources said the fate of the company would depend on how well a new CEO can play their role. .
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