Naver Cloud with Wings... Emerging as a New Growth Engine

[Asia Economy Reporter Buaeri] Naver's 'cloud-like' surge is showing no signs of slowing down. Analysts say that the reason Naver surpassed 2 trillion won in quarterly sales for the first time in history is due to its 'cloud boom.'

According to Naver on the 30th, its third-quarter sales reached 2.0598 trillion won (1.3608 trillion won excluding Line sales), a 24.2% increase compared to the previous year, with cloud sales growing 66.2% year-on-year to 76.3 billion won. By segment, this growth rate is second only to the fintech business. Naver began disclosing cloud segment sales separately from this quarter. Until the previous quarter, finance and cloud were reported together. A Naver official explained, "Naver Cloud will firmly establish itself as a major revenue source going forward."

In fact, Naver Cloud has solidified its position in the domestic cloud market, which had been dominated by global companies such as Amazon Web Services (AWS), within just three years of challenging the market. NeuroCloud organically connects the Naver Cloud Platform with corporate systems to create a 'hybrid cloud environment.' Currently, institutions such as the Bank of Korea, Ministry of Strategy and Finance, Hanwha Life Insurance, and IBK Industrial Bank are using Naver Cloud. Naver Cloud has launched over 170 products in three years, with sales doubling annually. According to global market research firm Synergy Research Group, Naver Cloud ranked 5th in the Asia-Pacific cloud infrastructure market by revenue.

Line Works, a cloud-based business messenger, is also leading the industry in the Japanese market. Naver has rebranded it as 'Naver Works' domestically and has begun aggressively targeting the market. Naver's active push into the cloud business is due to the increased growth potential as untact (non-face-to-face) environments such as remote work become normalized. Korea IDC analyzed that last year, the domestic public cloud market reached 1.301 trillion won, a 25.2% increase compared to the previous year.

Naver plans to further expand its cloud business starting this year. Han Seong-sook, CEO of Naver, stated during a conference call, "Naver Cloud will mark this year as the inaugural year of B2B (business-to-business) business and will build specialized solutions for each business sector such as education, commerce, and gaming by integrating various services, technologies, and data know-how."