Oracle director says AI has 'real potential' for Korean companies

Industry

Oracle director says AI has 'real potential' for Korean companies

Published: 10 Aug. 2024, 07:00

LEE JAE-LIM
lee.jaelim@joongang.co.kr

Oracle Korea Managing Director Kim Sung-ha poses for a photo after an interview with the Korea JoongAng Daily at the tech giant's office in southern Seoul on Tuesday. [PARK SANG-MOON]

Views remain divided on the “AI bubble” — from skepticism to high optimism — but Oracle is betting that its AI-powered analytics and management tools will be able to meet the growing demands of its Korean enterprise customers.

“This year, Oracle Korea’s main objectives are to accelerate the provision of integrated data and AI solutions and to support the cloud transition of key enterprise systems,” said Oracle Korea Managing Director Kim Sung-ha said in a recent interview with the Korea JoongAng Daily at the tech giant's office in southern Seoul. “The overarching goal is to continue to achieve double-digit revenue growth annually, a trend that we have maintained over the past three years.”

Kim was appointed to head Oracle Korea in January, taking over for Tom Song, its former managing director. Before taking up his Oracle post, Kim headed the Korean division of Seattle-based data analysis company Tableau, as well as domestic firms Freestyle Technology and epapyrus. He also served in the marketing and sales divisions at Hyundai Motor, Adobe, SAP and IBM.

During the first half of the 2024 fiscal year, Oracle Korea's cloud division reported a fourfold on-year increase in revenue from business with conglomerates as well as 60 percent surge derived from dealings with small-and-mid-sized enterprises and startups.

Oracle's shares spiked back in June when the company entered a three-way partnership with Microsoft and OpenAI and announced that its Oracle Cloud Infrastructure (OCI) would complement Microsoft's Azure to handle complex AI workloads as demand for ChatGPT continues to grow. Along this line, Oracle hopes to add a yet-to-be-revealed Korean AI startup to its roster of partners, although the two sides are still mapping out the details of their collaboration.

Oracle Korea Managing Director Kim Sung-ha speaks during an interview with the Korea JoongAng Daily at the tech giant's office in southern Seoul on Tuesday. [PARK SANG-MOON]

“We are preparing to collaborate with domestic companies with proprietary large language models [LLMs], where Oracle will provide the infrastructure and software needed. What this means is that we can provide additional Korean language services using our Oracle Cloud Infrastructure and offer combined solutions to our Korean clients.”

Oracle currently leverages LLMs from Cohere and Meta that can support more than 100 languages including Korean — but if this yet-unnamed domestic startup joins Oracle, it would become the AI company with the largest base of data in its mother tongue.

Oracle currently operates two data centers in Seoul and Chuncheon, Gangwon, which Kim says is sufficient to handle the clients' growing demands as of now.

“But if the demand increases rapidly, we are prepared to expand our facilities in close cooperation with our headquarters,” Kim said. “The two regions are focused on public cloud services, but we are also established dedicated regions for private cloud services — known as DRCCs, or Dedicated Region Cloud Customers — domestically as well.”

Financial firms have has been early adopters of cloud technology due to their need for scalable, flexible and cost-effective infrastructure and data security, but Kim forecasts that e-commerce, game and health care players will be among Oracle's new clients in Korea.

“We are gaining new customers in e-commerce and gaming, such as the case of Korean game publisher Woncomz,” he said. “The company transitioned to Oracle from another cloud company, and it reported a cost-saving rate of 75 percent. After analyzing the costs, the company told us that Oracle offers the most affordable network. Oracle provides a single pricing model globally, whereas other cloud service providers have different prices for different regions. Many of our customers consider this global pricing consistency one of Oracle’s key advantages.”

In health care, however, Kim foresees hurdles ahead. Korean hospitals and medical facilities still remain conservative about potential leaks of their data.

“Korea’s health care system is relatively advanced compared to the U.S., which still has some outdated electronic management systems, but there is still room for improvement,” Kim observed. “Oracle’s foremost value lies in protecting our clients’ data, but the trust and validation of such cloud-based solutions in Korea are still evolving. Nevertheless, we have achieved significant achievements with two of our domestic clients in the pharmaceutical sector, which we are to outline by this fall.”

Oracle, a relative latecomer in the global cloud industry compared to Amazon Web Services, Google and Microsoft, has traditionally focused on its mainstay database business. But the company now maintains that the era of multicloud strategy has arrived, and it now aims to offer its enterprise clients attractive cloud products that can easily integrate with AI.

Kim projects that Oracle’s database and client networks, both of which have taken decades to establish, will quickly gain firmer footholds.

“Oracle’s greatest strength lies in our extensive business-to-business experience. Since its founding by Larry Ellison, Oracle has consistently focused on addressing the needs and challenges of enterprises from various sectors […] In contrast, our competitors have different origins: Some started by selling online books and later became cloud providers, while others began with office software and expanded into cloud services. Oracle’s foundation, however, is built on providing comprehensive business solutions from end to end, including enterprise resource planning, customer relationship management and human capital management applications. This depth of expertise and integrated approach is what makes Oracle uniquely strong.”

Kim also knocked away concerns that an AI bubble is about to burst, claiming that the hyped technology can no longer be merely identified as a passing trend or marketing buzzword.

“Nvidia chips made previously impossible tasks feasible, with real potential to impact our daily lives,” he said. “However, when it comes to implementing AI for enterprises rather than for general consumers, there are still various considerations to address, and that’s where Oracle comes into the picture. We have spent decades working closely with our customers to understand and develop their business processes. This experience has given us deep insight into their major pain points, which is why I believe we are well-positioned to address them.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]