Aftermath of National Network Outage... Growing Expectations for the Public Cloud Market

Public Network Cloud Transition Speed Expected to Accelerate
KT Cloud, No.1 in Public Cloud Market, Gains Momentum
KT's 'Hidden Gem', No.1 in Business Revenue Growth Rate

KT Cloud, a subsidiary of KT, is gaining attention amid the aftermath of the 'national computer network' outage that occurred four times in one week. This incident is expected to accelerate the cloud transition projects of public institutions. KT Cloud holds the top position in the public cloud market with a 42.2% market share as of last year. In the market, there is even talk that "KT Cloud has grown wings."

Jang Chan-ho, Executive Director of IT Strategy Planning at KT (right), and Han Eun-sun, Head of Korea IDC (left), are posing for a photo while holding the KT 2023 IDC Future Enterprise Award certificate together.
[Photo by KT Cloud]

On the 28th, Hanwha Investment & Securities stated in a report, "Currently, most of the national computer networks are difficult to manage in an integrated and systematic way," adding, "This will boost the previously sluggish public cloud transition projects and positively impact KT Cloud, the leading company." At present, most administrative and public institutions build their own computing environments such as servers independently. Because of this, system connectivity between institutions is poor. When a problem occurs, it takes a long time to identify the cause since each institution's system must be individually examined.

For these reasons, cloud transition is emerging as a solution. This method uses virtualized computing resources instead of institutions owning servers directly. Since scattered resources can be managed in one place, it is easier to identify the cause when problems arise. The Digital Platform Government Committee has also mandated 'cloud transition,' aiming to increase the cloud usage rate of administrative and public institutions to 70% by 2026. The usage rate was 18% as of last year. Following the computer network outage incident, public opinion favoring cloud transition is growing stronger.

KT Cloud's NPU (Neural Processing Unit) infrastructure service applied with Rebellion's Atom chip. It was the first in Korea.
[Photo by KT Cloud]

KT Cloud is gaining attention due to its overwhelming position in the public cloud market. As of last year, KT Cloud held a 42.2% market share, ranking first, followed by NHN Cloud with 17.2% and Naver Cloud with 15.6%. Other players in the public cloud market include Gabia (12.5%), Samsung SDS (5.5%), and Kakao Enterprise (0.8%). KT launched the first public cloud service in Korea in 2015. It started as a cloud business division within KT and was spun off as a subsidiary last year.

KT Cloud is known as KT's 'hidden gem.' Among all KT businesses, the cloud business has shown the highest average annual sales growth rate over the past three years. Sales were 391 billion KRW in 2020, 456 billion KRW in 2021, and 524 billion KRW last year, growing more than 10% annually. This performance stands out compared to KT's representative businesses such as telecommunications, internet, and landline phones, which have stagnated. It is considered a new growth engine for KT alongside its AI (artificial intelligence) business. KT plans to launch new services specialized for public institutions starting next year, in line with the government's cloud transition policy.