Samsung Electronics is planning to gradually lower its dependence on AWS (Amazon Web Service) and is looking to use its own cloud system because it believes that it is better for it to lower its dependence on AWS considering many factors such as cost and security.
According to the industry, Samsung Electronics has decided to lower its dependence on AWS and expand a private (internal) cloud.
Samsung Electronics’ cloud was made up of 60% of AWS and 40% of a private cloud in order for Samsun Electronics to provide its services globally. Samsung Electronics is going to first bring in its cloud system to few business departments and conduct few tests. When stability and others are confirmed, it is going to gradually expand the cloud system to other business departments as well.
“Besides Samsung Electronics, every subsidiary of Samsung has been considering the direction of cloud use as amount of AWS use has been increasing.” said a representative for the industry. “While reducing dependence on AWS, Samsung Electronics is going to expand the use of its cloud and it will be the first subsidiary of Samsung to implement the plan.”
It is expected that this change in Samsung Electronics’ strategy will have significant impact on major corporations that are going through digital transformation by public clouds. One of the main reasons why Samsung Electronics has decided on this change is cost reduction. Samsung Electronics has been paying AWS hundreds of millions of dollars annually. The industry estimates that Samsung Electronics paid more than $483 million (600 billion KRW) to AWS in 2019. The issue is that this cost has been increasing every year. Samsung Electronics has been using clouds more as the number of its products such as smartphone and smart TV that are connected to internet has been on the rise. It is expected that amount of cloud use will increase exponentially in the future when the number of smart home appliances will be much higher. Because the cost of using AWS is proportional to the number of products that require internet, Samsung Electronics has been looking for an alternative to AWS in order to reduce the cost it pays AWS.
“In addition to cost reduction, Samsung Electronics has been concerned about a security issue as AWS is an American company.” said a representative for the industry. “As a result, Samsung Electronics came to the conclusion that it would be better to reduce its dependence on AWS.”
The group that will guide the direction of Samsung Electronics’ cloud has not been decided yet. Ability to support global data centers is important in order to guide a private cloud. Most of Samsung Electronics’ private cloud is currently managed by Samsung SDS that operates 4 data centers and 13 data centers in South Korea and other countries respectively.
“Although Samsung Electronics acquired Joyent, an American company specializing in cloud computing, in 2016, it has been thinking over Joyent many times as Joyent has yet to show any special ability.” said a representative for the industry. “It is likely that Samsung Electronics is looking to create opportunities to utilize global data centers owned by Samsung Electronics and Joyent.”
This change is expected to create a huge blow to AWS’ sales. AWS has been gaining major corporations and financial companies in South Korea in addition to Samsung Electronics as its customers as it has continuously expanded its multiple data centers in South Korea after 2016.
Staff Reporter Kim, Jiseon | email@example.com