SOUTH KOREA CLOUD COMPUTING INDUSTRY SNAPSHOT
- It's evident that the South Korea cloud computing market is on track to reach an impressive US$ 10.12 billion in revenue by 2024.
- This growth trajectory is underpinned by an expected Compound Annual Growth Rate (CAGR) of 9.97% from 2023 to 2031, as forecasted by DataCube Research.
- When analysing the dynamics within South Korean cloud computing market landscape, it becomes apparent that the software as a service (SaaS) segment carry significant potential. Projections suggest that by 2031, this segment will assert its dominance, boasting a market value of US$ 9.8 billion.
- Furthermore, the role of end users cannot be overlooked. It's projected that by 2031, collective share of 18.01% of the total South Korea cloud computing market size will be attributed to BFSI and IT & telecom end users.
- Looking ahead, industry experts are optimistic about the future of the healthcare sector in cloud computing. Throughout the forecast period, this sector is anticipated to undergo the most rapid expansion in terms of revenue generation, with a 14% Compound Annual Growth Rate (CAGR).
SOUTH KOREA CLOUD COMPUTING INDUSTRY TRENDS AND DEVELOPMENTS
South Korea has emerged as a technology powerhouse, and its cloud computing landscape reflects a commitment to innovation and digital transformation. Most of the leaders in organizations in South Korea understand the importance and value of cloud technology and see its potential to digitize business processes, thereby enabling virtual work and overall business model transformation. Further, in the fast-evolving landscape of South Korea's technological ecosystem, the adoption of cloud computing witnessing increased uptake as organizations including large and SMBs across industries such as BFSI, manufacturing, healthcare, and retail recognize the imperative to innovate and remain agile in the face of global challenges. This is boosting growth of the South Korea cloud computing market. Businesses in South Korea are increasingly embracing hybrid cloud models, strategically blending the advantages of public and private clouds to optimize scalability and security. Apart from this, rising awareness of benefits that cloud technology adoption can bring to end user enterprises spanning across various industry verticals and government agencies is anticipated to positively impact performance of South Korean cloud computing market during the forecast period.
Additionally, the integration of edge computing with cloud services has become an emerging trend in the country, highlighting the nation's focus on real-time data processing and reducing latency. Moreover, introduction of favourable government initiative such as Korean New Deal, underscore a country’s commitment to accelerate digital transformation. With cloud computing playing a central role in modernizing public services and infrastructure, the country is positioning itself at the forefront of harnessing intelligent technologies for sustainable growth. This in turn, is projected to boost growth of the South Korea cloud computing market during the forecast period. Also, below developments and trends are observed in South Korea cloud computing industry:
- "Smart City" initiatives, currently underway, witnessing multiple Korean cities deploying advanced programs that harness the power of cloud computing. These initiatives aim to enhance traffic management, bolster public safety measures, and elevate citizen services through innovative technological solutions.
- Equinix and GIC invested $525 million in two hyperscale data centers: This significant investment (announced in December 2023) aims to address the growing demand from major cloud providers and hyperscale companies for core workload deployment needs in South Korea. The new Equinix xScale data centers are expected to provide over 45 MW of power capacity and further solidify Seoul's position as a key interconnection hub in the region.
- According to the "Global Interconnection Index" curated by Equinix, Seoul is poised to emerge as a primary hub for interconnection bandwidth from hyperscale providers in the Asia-Pacific region by 2024. This projection highlights the strategic significance of Seoul as a pivotal gateway for cloud computing operations, emphasizing its pivotal role in facilitating seamless connectivity and fostering digital innovation across the region's technology landscape.
- Korea Digital New Deal, launched in 2020, sets forth an ambitious vision to position Korea as a digital leader by 2025. Central to this initiative is a strong emphasis on widespread cloud adoption spanning critical sectors such as healthcare, education, and social services.
- As the cloud computing landscape in Korea evolves, homegrown providers such as Naver Cloud and KakaoTalk are significantly broadening their service portfolios. This strategic move underscores a growing trend where domestic players are intensifying competition with global behemoths like AWS and Microsoft Azure. By offering specialized and localized cloud solutions tailored specifically for the Korean market, these local providers are asserting their presence and striving to capture a larger share of the rapidly expanding cloud services industry.
- Enacted in 2018, the Cloud First Policy mandated government agencies to prioritize cloud services for new projects over traditional on-premise IT infrastructure. This policy directive plays a pivotal role in accelerating cloud adoption within the public sector and driving forward Korea's digital transformation agenda.
SOUTH KOREA CLOUD COMPUTING MARKET COVERAGE
2019 – 2031
2019 – 2022
2023 – 2031
- Infrastructure as a Service (IaaS)
- Platform as a Service (PaaS)
- Software as a Service (SaaS)
- Public Cloud
- Private Cloud
- Hybrid Clou
- On-Demand Subscription
- Committed Use Subscription
- Package Subscription
- Hybrid Subscription
- Startups & Small Businesses (1-50 employees)
- Mid-Sized Companies (51-250 employees)
- Large Enterprises (251+ employees)
- IT and Telecom
- Media and Entertainment
- Energy and Power
- Transportation and Logistics