Korean Firms Losing Competitiveness Due to Competition of Unlimited Cloud Benefits

As competition of cloud services among global companies is intensifying, the price of cloud storage has become cheaper than physical storage devices such as hard disk drives, SSDs, and USBs. This is a very strange phenomenon.

According to the industry on June 29, Global IT companies including Google, Microsoft, and Amazon are competing fiercely with lower prices and additional storage space.

They focus on cloud storage because the important information of individuals and companies are stored in the cloud, not in physical storage devices, and this becomes an entry barrier to maintain the service. Especially in the case of corporate users, it is very hard to move to other service providers, since the users have already stored a lot of information on existing cloud infrastructure, and this requires a lot of storage space.

Google and Microsoft have lowered the price of cloud storage very competitively for the last year. Compared to a year ago, the price dropped to 20 percent o its previous level, and available space increased by two to five times. As a result, the price of cloud storage became one tenth of the previous year.

This trend of global competition will last for a while, and this will influence Korean companies as well.

Experts in the software industry predict that the cloud storage of Korean domestic portals used by both corporate and individual users will be affected by Google and Microsoft in the long term. Currently, Naver provides 30GB per account and Daum 50GB per account for free. A software industry insider said, “Korean companies are losing competitive advantages as economies of scale are getting more important in cloud storage businesses.” He added, “Korean companies need to find special niches and provide differentiated services.”