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Korean government puts its weight behind local cloud

Steve Hodgkinson | Jan. 14, 2010
Koreas Communications Commission has announced commitment of over US$500 million to the development of Korean cloud computing facilities.

Koreas Communications Commission has announced commitment of over $500 million to the development of Korean cloud computing facilities. This is a good example of government action to bolster the local IT industry as well as to create a government cloud (g-cloud) to cut its own IT costs. Other countries in the region should take note.

The Korean government has recognised that cloud computing is a double-edged sword

Ovum logoSouth Korea has long had an interest in public policy interventions aimed at bolstering the competitiveness of its industries. The result has been a country with more than its fair share of powerhouse exporting corporations, such as Daewoo, Hyundai, Kia, LG and Samsung. It is perhaps not surprising then that its policy executives have moved more quickly than many others in the region to ensure that Korea is well positioned to ride the coming cloud computing wave.

We have argued over the past year that cloud computing needs to be seen by governments as a double-edged sword. The cloud is the ultimate globalised market, offering any country the opportunity to export IT services to the world. However, it also creates the potential for parts of a countrys ICT industry to be made redundant. Cloud services offer an unprecedented encapsulation of the full ICT value chain, from hardware through to software and services. Consumption of offshore cloud services creates few jobs in the local economy.

The Korea Communications Commission recently announced that it is partnering with the Ministry of Knowledge Economy and the Ministry of Public Administration and Security to invest over $500 million in cloud computing infrastructure for use by both the government and the local ICT industry. This leverages the insights Korea has gained from the involvement of its Electronics and Telecommunications Research Institute in the OpenCirrus collaborative cloud computing research programme.

The governments aim is to stimulate the development of the Korean cloud computing market so that Korean companies can pursue export opportunities in the global cloud services market. A further benefit is that government agencies can use the onshore cloud capabilities to reduce in-house ICT costs overcoming the reluctance of agencies to use offshore clouds.

As an illustration of Korean ambition, the goal is reportedly to capture 10 per cent of the global cloud services market by 2014 and to halve the cost of operating the public sectors ICT infrastructure.

Governments need to assess what this means for their country

Policy executives need to assess the impact of this announcement on their own ICT industry. What are the consequences for your ICT industry if Korea produces a powerful regional cloud computing services provider the cloud equivalent of an LG or a Samsung in electronics?


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