Cloud Competition
Global information and technology (IT) giants are set to target “Cloud Korea.” As the government is growing the cloud market through its “cloud computing stimulation plan,” Amazon Web Services (AWS), Microsoft (MS) and IBM have decided to open international data centers (IDCs) in Korea early next year.
According to IT market research firm Gartner Inc. and industry sources on Dec. 17, the domestic cloud market will rapidly grow with an annual average of 17.7 percent from US$540 million (635.5 billion won) last year to US$1.2 billion (1.4 trillion won) in 2019. In addition, the government plans to change its e-government services to cloud services by 2017, actively expanding the cloud market in the public sector. Due to the rapid market growth and the government’s efforts, the domestic cloud market has become an emerging target of global IT companies.
AWS, the world’s largest cloud service provider, will subsequently open its data centers in capital areas, including one in Mok-dong, Seoul, early next month.
In a bid to address data processing speed delays, Google, MS and Oracle have either borrowed the data centers of domestic cloud service operators or set up their own data centers. While Google and Oracle are watching the movement of competitors and securing experts, it is said that Microsoft will start the operation of its data center in Busan early next year.
IBM, which has been providing cloud services through data centers in Tokyo, Japan, has recently joined hands with SK Holdings C&C to set the foundation in the domestic cloud market.
Global IT companies are paying extra attention in the public sector. This is largely due to the fact that the government has a strong desire to promote the cloud service industry, including the enactment of an Act on the Development of Cloud Computing and Protection of Users. Another factor is that they will be able to expand their services to Japan and China through data centers in Korea, which has excellent information and communications technology (ICT) infrastructure.
A domestic software company official said, “Global companies, including AWS, are building their data centers to target domestic conglomerates and public markets and setting their pricing policies according to domestic tax laws. With KT launching cloud services for only public institutions, domestic companies are seeking to expand their businesses. However, a majority of the companies are in difficult situations in terms of technical skills and human resources.