Size of South Korea’s Cloud markets surpassed $831 million (1 trillion KRW) in 2016. After it was worth $416 million (500 billion KRW) in 2014, its worth doubled in just two years. As it is estimated to be worth about $1.66 billion in 2018, competitions between South Korean and foreign Cloud businesses are going to become fierce as they look to grab upper hands in South Korea’s Cloud markets.
According to ‘Cloud industry survey in 2016’ that was prepared by Korea Cloud Service Association on the 9th, size of South Korea’s Cloud markets (sales) in 2016 was $988 million (1.1892 trillion KRW) and this is 55.2% increase from sales in 2015 ($637 million (766.3 billion KRW)).
South Korea’s Cloud markets began to open in later-end of 2000s and their sales surpassed $416 million (500 billion KRW) for the first time in 2014. They surpassed $831 million (1 trillion KRW) in just two years and South Korea’s Cloud markets are growing at a fast rate.
Number of Cloud businesses is also increasing. Number of South Korea’s Cloud businesses in 2016 was 535 and this value is 51.6% increase from number of South Korea’s Cloud businesses in 2015 (353). Out of 535, 485 of them were small and medium businesses and this value increased by about 50% compared to 2015. Out of 535, 50 of them were middle-grade businesses and this value increased by about 30% compared to 2015.
“Enactment of laws regarding Cloud is beginning to take effect.” said Vice-Chairman Kim Young-hoon of Korea Cloud Service Association. “Many governments had been focusing on expanding Cloud services in 2016 with Ministry of Science, ICP and Future Planning (MSIP) at the center and results of their work are beginning to be seen.” Vice-Chairman Kim also added by saying that size of Cloud markets has grown as companies that had been showing passive stance to Cloud businesses are jumping into Cloud markets and that this year will be a year when South Korea’s Cloud industry will grow even bigger.
MSIP is estimating that sales from South Korea’s Cloud markets in 2017 will surpass $1.25 billion (1.5 trillion KRW) and $1.66 billion (2.0 trillion KRW) in 2018. It is also estimating that rate of usage of Cloud will surpass 20% in 2017 and increase up to 30%-range in 2018.
This year especially will be a year when public organizations will start to introduce private companies’ Cloud services. After South Korean Government did a survey recently on public organizations about their plans to use Cloud services, 18.6% (62) out of 333 them responded by saying that they are either currently using private companies’ Cloud services or are planning to use them in this year. 51 of them announced their plans to use private companies’ Cloud services in this year while only 23 public organizations used them in 2016.
As number of Cloud security confirmation organizations is increasing followed by KT, number of public organizations that decide to use private companies’ Cloud services is going to continue to increase.
Competitions between companies that are trying to grab upper hands in South Korea’s Cloud markets are going to become fiercer.
Major foreign companies such as AWS (Amazon Web Service), MS, IBM, and Oracle have been investing into South Korea’s Cloud markets since last year and they have set up separate data centers for customers in South Korea and reinforced number of their professional employees. South Korea MS will open its data center in South Korea shortly while South Korea Oracle will hold a huge Cloud event in South Korea during next week and announce its plans to put in all of their efforts into Cloud businesses. Efforts from foreign Cloud businesses in order to grab upper hands in South Korea’s Cloud markets are getting stronger.
This requires South Korea’s Cloud businesses to build up their competitive edge so that they don’t give up South Korean markets to foreign businesses. Currently South Korea’s technical skill in Cloud remains at about 80% of America’s technical skills. South Korean Government is planning to increase its skill up to 90% by end of 2018.
“We are going to work on building up competitive edge of South Korea’s Cloud businesses by expanding our middle and large-sized R&D projects that are based on Cloud.” said a representative for MSIP. “We are also planning to expand global service-type SaaS (Software as a Service) promoting projects by partnering up with leading Cloud businesses in South Korea and other countries.” This representative also added by saying that South Korean Government will build up its consulting support for public organizations so that it can draw public demands that will play a role of priming water of Cloud markets and push for huge projects in education and others that have huge influence and strengthen incentives according to use of Cloud services.
Staff Reporter Kim, Jiseon | river@etnews.com