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Concern about Dominance of Foreign Products Deepens
Cloud Market
Concern about Dominance of Foreign Products Deepens
  • By matthew
  • September 13, 2013, 07:25
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The domestic public cloud computing market will near 200 billion won (US$184 million) this year, almost 50% higher than last year. The market is forecasted to grow up to 500 billion won (US$460.7 million) by 2017. However, the foreign monopoly of the Korean market is intensifying, and experts point out that government-level countermeasures are necessary.

According to the latest trends report in cloud computing released by the National IT Industry Promotion Agency on September 11, the domestic public cloud computing market will reach 182.4 billion won (US$168.1 million) this year, recording a growth of 48.5% over last year.

By category, Platform as a Service (PaaS) is the fastest growing market. It has grown 63% over last year to reach 11.5 billion won (US$10.6 million) in market size. Software as a Service (SaaS) is the largest market, at 113.1 billion won (US$104.2 million), followed by infrastructure as a service at 59.6 billion won (US$54.9 million).

Citing IDC, the Agency estimated that the domestic public cloud markets will grow at an average of 31.5% a year to reach 500 billion won (US$460.7 million) in market size by 2017. 

The rapid growth rate in the domestic cloud markets is spurred by the aggressive market strategy of global cloud services such as Google, Microsoft, Oracle, and VMware. 

Based on 2Q 2013, Amazon is leading the global markets followed by Microsoft, Google, and IBM. Similarly, Amazon is speeding up its acquisition of the Korean market, where it established a local branch last year and recently started cooperating with domestic organizations such as KOTRA. Companies such as Microsoft and Oracle, that have been indifferent to Korean cloud markets, are also becoming more aggressive with services such as IaaS and SaaS.

The Agency advised that in order to turn the situation around, domestic companies need to fortify their cloud computing capabilities and, if necessary, establish strategic partnerships with global companies such as Amazon and Google to secure technology and expertise.

Furthermore, the government is proposing an “Act on Clouding Computing Development and User Protection” to clear concerns on security issues, which hinders the further spread of cloud computing. If this bill passes, cloud services are expected to become more actively used.