Pioneering Market with 'Kakao i Cloud'
Targeting Public Sector Following Enterprise Success
400 Billion KRW Invested in Data Center Construction
Naver Secures Numerous Enterprise Clients
Strong Performance in Finance and Healthcare
Building Asia's Largest Center 'Gak Sejong'
Kakao has officially entered the cloud business by launching an enterprise cloud platform and building a data center. A fierce competition is expected between Kakao, leveraging the friendly image of the "national messenger" KakaoTalk, and Naver, which has long established its position in the market.
Kakao Jumps into Cloud
According to Kakao on the 18th, its subsidiary in charge of business-to-business (B2B) operations, Kakao Enterprise, recently launched 'Kakao i Cloud' and began pioneering the market. A Kakao representative stated, "Currently, Kakao i Cloud is being used within the Kakao community and some external companies." 'Kakao i Cloud' is an enterprise cloud solution platform that provides an environment where data can be stored anytime and anywhere, supporting Kakao's artificial intelligence (AI) platform, app development engines, and more. It also highlights the ease of infrastructure management based on KakaoTalk and chatbots as a key strength.
Preparations for entering the public sector cloud market are also underway. Kakao Enterprise recently completed obtaining the Cloud Security Assurance Program (CSAP) certification from the Korea Internet & Security Agency (KISA) this month. This certification is a necessary procedure to provide cloud services to public institutions. The public sector cloud market is a land of opportunity for domestic cloud providers like Kakao. Due to stringent security certifications, global providers such as Amazon Web Services (AWS) have shown less interest in this market.
Kakao is also investing 400 billion KRW to build its own data center on the Hanyang University campus in Ansan, Gyeonggi Province. This data center is expected to become the core infrastructure of Kakao's cloud business in the future. Scheduled for completion in 2023, the Kakao data center will be a hyperscale facility (a massive data center capable of operating over 100,000 servers). The data center's computer building will house a total of 120,000 servers, with a data storage capacity reaching 6 exabytes (EB).
Naver Cloud's Strong Growth
Naver, which entered the cloud market early in 2017, has expanded its business to have 10 global bases including Japan, Singapore, the United States, and Germany. According to Naver, cloud platform sales grew 168% year-over-year as of April. A Naver Cloud representative explained, "We provide the largest scale of cloud services among domestic cloud companies."
Currently, Naver Cloud offers over 180 products. Its presence is particularly notable in the finance and healthcare sectors. It has secured Hanwha Life Insurance as a client and plans to create an environment where core IT systems of financial institutions can be hosted on the cloud. In healthcare, Naver supplied cloud services to hospitals under Korea University Medical Center in the second quarter of last year, and recently, Korea University Anam Hospital adopted Naver Cloud's Precision Healthcare Hospital Information System (P-HIS).
Naver is also actively targeting the public sector cloud market. According to Naver, more than 500 government and public institutions utilize the Naver Cloud platform in various ways. The Korea Education and Research Information Service (KERIS) used Naver Cloud technology to build an e-learning environment for over 5.4 million elementary, middle, and high school students. Recently, Naver won a project from the National Information Society Agency (NIA) to provide cloud infrastructure (IaaS) for public institutions. Naver Cloud's public sector cloud sales in the first quarter increased more than tenfold year-over-year.
As Naver expands its cloud business, it is building Asia's largest data center, 'Gak Sejong,' in Sejong City following 'Gak Chuncheon' in Chuncheon. With an investment of 650 billion KRW, Gak Sejong is a hyperscale facility with over 100,000 servers, six times larger than Gak Chuncheon. Han Seong-sook, CEO of Naver, said, "We plan to lead the cloud market by raising service levels tailored to the industrial characteristics of the public, financial, and healthcare sectors."
The reason Naver and Kakao are intensifying their cloud businesses is the market's growth potential. Global IT market research firm Gartner forecasts that the domestic cloud market size will grow from 3.24 trillion KRW this year to 3.7238 trillion KRW next year. The government is also promoting the cloud industry. According to NIA, the public sector cloud business scale this year is 821.4 billion KRW, of which 345.8 billion KRW is invested only in private cloud. An industry insider said, "Domestic providers are highly interested in the public sector cloud market, where global competition is relatively less intense," and predicted, "Intense competition among domestic providers will unfold in the future."
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