South Korea Cloud Computing Market by Service Model, Deployment Model, Subscription Model, Enterprise Size, End User – Industry Analysis, Size and Forecast, 2019-2033

South Korea Cloud Computing Market Growth and Performance

• It's evident that the South Korea cloud computing market size is on track to reach an impressive US$ XX.12 billion in revenue by 2025.
• This growth trajectory is underpinned by an expected Compound Annual Growth Rate (CAGR) of 9.97% from 2025 to 2033, as forecasted by DataCube Research.

South Korea Cloud Computing Market Outlook

A Strategic Transformation Fueling Asia’s Digital Leadership

South Korea has rapidly emerged as a global technology powerhouse, and its cloud computing industry is a testament to its commitment to innovation and digital transformation. Organizations across various sectors recognize the value of cloud technology in digitizing business processes, enabling virtual work, and transforming business models. This growing awareness is significantly driving the expansion of the South Korea cloud computing market. The increasing adoption of cloud technology among large enterprises and SMBs across industries such as BFSI, manufacturing, healthcare, and retail is a key factor propelling growth. Organizations are transitioning towards hybrid cloud models, strategically blending the advantages of public and private clouds to optimize scalability and security. The government's commitment to fostering digital transformation further strengthens market growth, making South Korea one of the leading cloud adopters in the Asia-Pacific region

Market Outlook Strengthened by Digital Policies and Enterprise Evolution

The South Korea cloud computing market outlook remains positive, driven by favorable government policies, robust infrastructure, and rising cloud adoption across industries. The government’s initiatives, such as the Korea Digital New Deal, highlight the country's dedication to accelerating digital transformation by promoting widespread cloud adoption in healthcare, education, and social services. Additionally, the Cloud First Policy, enacted in 2018, mandates government agencies to prioritize cloud services over traditional IT infrastructure, further accelerating cloud deployment in the public sector

The digital economy’s steady expansion, contributing over US$250 billion to South Korea’s GDP in 2024, is reinforcing enterprise cloud investments. Moreover, average annual enterprise cloud budgets have increased significantly: large corporations now allocate approximately US$2.1 million, while SMEs dedicate between US$170,000 and US$350,000 to cloud integration efforts. Cloud outsourcing models are evolving as well—offshore services are sought for cost optimization, whereas nearshore and onshore models are preferred for data sovereignty, regulatory compliance, and latency management. This flexibility has enhanced operational resilience in highly regulated industries such as finance and public administration

South Korea Cloud Computing Market Trends: Realigning Infrastructure and Access

• Smart City Initiatives: Multiple cities in South Korea are deploying cloud-powered smart city programs aimed at improving traffic management, public safety, and citizen services. Seoul’s AI-integrated mobility tracking and Busan’s energy efficiency initiatives exemplify this progress.
• Edge Computing Integration: With widespread 5G deployment, organizations are integrating edge computing with centralized cloud platforms to accelerate real-time data processing. This trend is particularly notable in logistics, healthcare, and autonomous vehicle testing zones.
• Hyperscale Data Centers: Equinix and GIC’s investment of US$525 million in two hyperscale data centers underscores the growing demand for cloud infrastructure in South Korea. These centers are designed to support both regional workloads and international enterprise demands.
• Interconnection Bandwidth Growth: According to Equinix’s Global Interconnection Index, Seoul is projected to become a key hyperscale provider hub in Asia-Pacific by 2024, with a surge in bandwidth demand from media, retail, and fintech industries.
• Rise of Domestic Cloud Providers: Homegrown service providers such as Naver Cloud and Kakao Enterprise are increasing their competitiveness by offering Korea-specific cloud security standards, customer service in native language, and AI-driven platform services tailored for local SMEs.

The rise of SaaS startups is further fueling momentum. As of 2024, South Korea is home to over 3,100 active SaaS firms, with a 12% YoY growth rate, particularly in segments like HRTech, EduTech, and MarTech. These firms are driving demand for container-based infrastructure, serverless computing, and integrated DevOps pipelines, making the startup ecosystem a crucial contributor to cloud innovation

Adoption Trends Reflect Functional and 5G-Supported Use Cases

Functional cloud deployment is increasing across sectors, with industry-specific workloads—like Electronic Medical Records (EMRs) in healthcare and predictive analytics in manufacturing—requiring tailored deployment models. Cloud technology adoption in South Korea is no longer generic; it is driven by defined operational use cases. There is growing interest in serverless computing for microservice-driven applications, reducing infrastructure complexity and enhancing time-to-market for digital services

South Korea’s nationwide 5G availability is also giving rise to 5G-enabled cloud services, especially in video streaming, AR/VR education, and autonomous retail. Meanwhile, cloud user behavior in South Korea shows a divergence: while large enterprises focus on multi-cloud strategies and security integration, SMEs prefer simplified platforms with managed services. That said, SME adoption still faces barriers, including migration costs and limited internal IT capabilities. On the other hand, born-in-the-cloud startups are leveraging container-native platforms and AI-enhanced automation, reducing operational overhead and enabling scalability from day one

Legacy modernization is another key area, with over 58% of Korean enterprises initiating ERP-to-cloud transitions or app modernization projects in 2024. The emergence of Kubernetes as a standard for orchestration is transforming how companies rearchitect their workloads to enhance agility and resilience

Strategic Positioning: Major Brands and Competitive Developments

The South Korea cloud computing market is characterized by a mix of global giants and agile domestic players. Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) maintain strong market shares through large enterprise contracts and developer ecosystems. Local counterparts such as Naver Cloud, Kakao Enterprise, NHN Cloud, and KT Cloud are leveraging their understanding of Korean regulatory, cultural, and technological dynamics to gain market share, particularly among SMEs and public agencies

• ISVs (Independent Software Vendors) and OEM-integrated solutions are expanding rapidly. In February 2024, Naver Cloud announced a partnership with Samsung SDS to offer AI-backed analytics-as-a-service for logistics companies. Meanwhile, Kakao Enterprise launched a cloud-native collaboration platform tailored for hybrid workplaces, targeting the education and startup sectors.
• In May 2024, Microsoft opened a new cloud region in South Korea to enhance latency-sensitive applications and meet growing demand in gaming and financial services. Similarly, AWS expanded its local availability zones, focusing on compliance and resiliency for data-sensitive clients.

Strategically, local cloud firms are prioritizing ecosystem building. Kakao Enterprise, for instance, has launched a startup acceleration program offering cloud credits, AI tools, and developer resources, aimed at cementing its position as a default partner for Korean startups. Naver Cloud is investing in sovereign cloud services, ensuring compliance with Korea’s Personal Information Protection Act (PIPA), which is increasingly a differentiator in public sector contracts

Author: David Gomes (Manager – IT)

*Research Methodology: This report is based on DataCube’s proprietary 3-stage forecasting model, combining primary research, secondary data triangulation, and expert validation. [Learn more]