Cloud Service Competition
South Korean information and Communication Technology (ICT) companies, including Naver, will jump into the global cloud services market which will grow to US$383.3 billion (440 trillion won) in 2018. Accordingly, all eyes are on whether it will change the market landscape monopolized by four global firms such as Amazon and Google.
Naver announced that Naver Business Platform (NBP), a Naver’s subsidiary providing information technology (IT) infrastructure and solutions, released a public cloud service platform Naver Cloud Platform on April 17. During a press conference held in Yeoksam-dong on the same day, NBP CEO Park Won-ki said, “We aim to become one of the top five global tech companies within the next two years by making heavy investments in cloud technology and strengthen cooperation and partnership with other companies.”
Cloud services are a fundamental component of core technologies in the Fourth Industrial Revolution including artificial intelligence (AI), autonomous vehicles as well as the Internet of Things (IoT). These technologies have one thing in common that they produce huge amounts of data. So, there should be the structure that exchange data in real time with virtual data storage in order to be used in real life. Park said, “Overseas studies show that 4 petabytes of data, which is enough to store about 700,000 DBD movies, are created when an autonomous vehicle runs for just two hours. In a bid to store and analyze such vast amounts of data according to its purpose, cloud services are essential.” An AI algorithm and self-driving system serve as the human brain, while a cloud platform serves as the body.
According to the data from Gartner, the global cloud market was dominated by four global leading companies – Amazon, Google, Microsoft and IBM – with a combined market share of 63 percent as of the fourth quarter of 2016. The global cloud market was estimated at US$246.8 billion (280 trillion won) last year.
Naver’s biggest competitive edge is its direct experience in using a cloud server to operate Naver’s flagship web-based services like the Naver portal website, mobile messenger Line and picture and video sharing app Snow. Moreover, Naver expects that it will be able to secure technologies that can compete with “big four” companies in a short period of time when it establishes an ecosystem to cooperate with other companies by opening its cloud platform.”
In fact, Naver will start providing the services in six countries, such as South Korea, Hong Kong, Germany, Japan and the U.S., by the end of this year and then expand the business to Middle East and Southeast Asia later.
In the domestic market, Naver will also need to compete for market share with KT, No.1 service provider, and SK C&C, which has the full backing of SK Group. KT announced on the same day that it established an additional corporate storage at the Cloud Data Center 2 in Mok-dong, while SK C&C recently held a large information session for corporate customers.
An official from Naver said, “We are required to secure the competitiveness of cloud services in order to make a breakthrough in the Fourth Industrial Revolution. The cloud market will be the last battlefield for supremacy of global technologies.”