"Naver Cloud Challenges for No.1 Spot with Double Growth Every Year"

[Asia Economy Reporter Bu Aeri] Naver has officially thrown down the gauntlet in the cloud market, which has long been considered the exclusive domain of global companies such as Amazon Web Services (AWS) and Microsoft (MS). Having maintained its position as the number one domestic portal, Naver now aspires to claim the top spot in the cloud market. This ambition is driven by concerns that if the cloud business, the foundation of the ICT industry, becomes dependent on overseas companies, the domestic ecosystem could be destabilized. Naver is positioning cloud as a new growth engine and is accelerating business expansion, including overseas ventures.

Doubling Growth Every Year

Hansangyoung CPO

On the 15th, Sangyoung Han, Chief Product Officer (CPO) of Naver Cloud, stated, "Revenue and other metrics are doubling every year," adding, "Initially, most customers were startups, but recently, financial institutions, public organizations, and large corporations have reached the final decision-making table." As of the third quarter of this year, Naver Cloud's revenue reached 76.3 billion KRW, a 66.2% increase compared to the previous year.

Since entering the market in 2017, Naver Cloud has actively expanded its customer base to include large corporations by developing services such as Neuro Cloud this year. This approach organically connects the Naver Cloud platform with corporate systems to create a 'hybrid cloud environment.' Recently, financial institutions like the Bank of Korea and Hanwha Life Insurance have chosen Naver Cloud, and Samsung.com, which previously used AWS, has also become a Naver Cloud customer. The CPO emphasized, "Cloud is a fundamental element in IT business. In terms of offline business, it is like land and buildings," adding, "We are especially focusing on securing competitiveness in the corporate market."

Naver Cloud has differentiated its services from overseas providers by emphasizing the characteristics of domestic companies. A representative example is the 2018 AWS Seoul region outage, which caused service disruptions for domestic AWS users such as Coupang, and communication difficulties led to significant challenges. Global companies often respond slowly due to headquarters policies when issues arise, causing dissatisfaction among domestic companies. The CPO explained, "Because our response to service improvements is fast, domestic customers respond positively," adding, "Based on feedback, we have rapidly improved service and technical levels." Currently, Naver Cloud has about 20,000 corporate customers.

Growing Cloud Market

Naver is paying close attention to the growth trend of the cloud market. According to market research firm Gartner, the domestic cloud market size is expected to grow from 2.7818 trillion KRW this year to 3.7238 trillion KRW by 2022. In response to this growth, global companies including AWS, Google, and recently China’s Tencent are expanding their Seoul region availability zones, showing strong interest in entering the Korean cloud market. The CPO predicted, "Most internet companies and gaming industries use cloud, but public and financial institutions and traditional large corporations have a conversion rate of about 5-10%. The growth potential is enormous."

Naver Cloud is also preparing to launch bundled products targeting Korean companies. Scheduled for release in February next year, 'Naver Cloud for Smart Work' is an all-in-one product combining the corporate messenger Naver Works and corporate business systems such as HR accounting and payment, Workplace.

Starting with Southeast Asian countries, Naver is also accelerating its entry into the global market. According to global market research firm Synergy Research Group, Naver Cloud ranked fifth in the Asia-Pacific cloud infrastructure market by revenue. The CPO stated, "Our short-term goal is to be number one in the Korean market, and globally, we aim to be in the top five. Just as AWS and MS are mentioned when talking about cloud, we want Naver Cloud to be mentioned as well."