Microsoft, Amazon pose a threat to Korea's domestic cloud firms: Report

Microsoft, Amazon pose a threat to Korea's domestic cloud firms: Report

by Pranali Mehta

International technology giants Microsoft and Amazon are reportedly set to challenge the prominence of domestic firms in South Korea’s cloud computing services industry for the nation’s public sector after the government recently decided to significantly lower entry barrier for the sector.

The Ministry of Science and ICT is working to relax restrictions regarding security certification for cloud systems in order to enable firms to offer cloud computing services to the public sector even if they do not plan to physically segregate their cloud servers for the private and public sectors. The science ministry will reveal more information about its strategy later this year.

International cloud service companies have essentially been unable to offer their services to the public sector under the current guidelines. As a result, the state-run and government organizations have given domestic firms contracts to develop cloud computing solutions for them. The overall size of such projects is expected to exceed 1 trillion won ($742 million).

On the contrary, foreign companies have taken over 90% share of the market for cloud computing services for the private sector.

Microsoft, Amazon Web Services (AWS), and other tech companies from the United States and China have accepted the proposed loosening of regulations. They are beginning to look for cloud computing services experts for the public sector, regardless of the growing concerns faced by KT, Naver, NHN, as well as other Korean cloud service providers about the chances of overseas companies gaining dominance in the domestic market.

A regional cloud computing firm official stated that AWS has already started to engage additional staff to bolster its cloud computing services team for the public sector. U.S. companies are able to compete with Korean firms by offering prices that are extremely cheap.

Microsoft is supposedly considering recruiting more staff to offer cloud computing services to the public sector.

Several critics have argued that the deregulatory actions taken by the government in haste could make Korea's cloud computing sector more reliant on overseas firms.

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Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...