To Invest 400 Bil. Won to Build Data Center

Kakao plans to launch integrated artificial intelligence platform Kakao i Cloud.

Kakao will invest 400 billion won to build a data center and make a foray into the cloud industry in earnest.

Kakao plans to compete with Amazon Web Services and Microsoft not only in the infrastructure as a service (IaaS) sector, which is dominated by global players, but in the software as a service (SaaS) sector where demand for untact services has risen amid the spread of the new coronavirus.

Kakao signed a memorandum of understanding (MOU) with Gyeonggi Province and Hanyang University on Sept. 7 to build a data center and industry-academic cooperation facilities on the premise of Hanyang University's Erica Campus in Ansan, Gyeonggi Province.

The Kakao data center, to be completed in 2023, is a hyper-scale data center that can run a total of 120,000 servers and store data up to 6 exabytes (about 6.3 million terabytes). A hyper-scale data center can run more than 100,000 servers.

Previously, Naver completed its first data center in 2016, and plans to establish a second data center in Sejong City in 2022. The company is expanding its data center by investing a huge amount of money.

Korea's IT companies are aggressively investing in data centers in order to strengthen their software-as-a-service (SaaS) and platform-as-a-service (PaaS) businesses. Demands for SaaS and PaaS are increasing recently. In the Korean SaaS market, major players include foreign companies such as SAP and MS, and Korean companies such as Duzon Bizon. But the market is devoid an absolute leader. The shares of the major players do not exceed 10 percent.

Industry insiders believe that a data center is essential for the development of artificial intelligence (AI), which Kakao is regarding as one of its future growth engines. Kakao plans to provide the Kakao i Service, an integrated artificial intelligence platform that combines AI core technology with cloud computing.

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