[Reporter’s Notebook] Kakao Promised Full Disclosure, But Investment Amount Remains a Trade Secret?

On the 20th, as Kakao entered an emergency management system following the resignation of CEO Namgung Hoon due to a data center fire disruption, employees were arriving at work in the lobby of Kakao Ajit in Seongnam, Gyeonggi Province.
Seongnam ? Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yuri Choi] "Tripling investment in service stabilization." Kakao announced measures to prevent the recurrence of service outages over two days starting from the 7th. This was the first countermeasure released after the nationwide blackout caused by the fire at SK C&C Pangyo Data Center, which paralyzed the daily lives of the entire nation, drawing significant attention. Kakao has pledged to prioritize service stabilization and invest more than three times the amount spent over the past five years in the next five years.

However, they did not disclose the specific amount to be invested. Citing trade secrets, they only explained that the funds would be invested in various areas such as data center (IDC) construction, infrastructure equipment purchases including servers, and information security. This raised some eyebrows. The figures are already publicly disclosed by major IT companies like Kakao and Naver. These companies report their capital expenditures (CAPEX), including tangible assets like IDC and servers, and intangible assets like licenses, as well as research and development (R&D) costs every quarter. Since this year, with the mandatory disclosure of information security, investment amounts in information security are also being revealed. Kakao’s investments in CAPEX and R&D up to the third quarter this year are 456.3 billion KRW and 742.6 billion KRW respectively, and last year’s information security investment was 14 billion KRW.

The claim of trade secrets implies that revealing this information to competitors could cause harm. It is bitter to see the scale of investment, which is supposed to be a responsibility and reflection on painful mistakes, being weighed in terms of gains and losses.

Kakao has emphasized that it will disclose details related to the blackout incident thoroughly. Choosing the publicly accessible developer conference ‘If Kakao’ as the venue for the announcement was also meant to convey this. Hong Eun-taek, CEO of Kakao, said, "We intend to transparently disclose the technical situation and improvement process related to this incident to contribute to technological advancement in the IT industry." It is contradictory to say that the cause of the outage analyzed by external experts and the service stabilization technology developed will be disclosed externally, while the investment scale remains confidential.

The measures Kakao has presented this time are not technically groundbreaking. Nevertheless, the significance lies in the will and promise to mobilize all available resources to implement multiple layers of measures to prevent recurrence. To ensure that this promise does not remain empty words, Kakao must disclose everything transparently.