'New Year will be crucial to Korea's cloud market'
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Yoo Jae-sung
By Yoo Jae-sung
The year of 2014 has been a period of growth for the domestic cloud computing industry.
There has been active implementation of cloud computing in not only industries that have been traditionally proactive in adopting it, such as manufacturing and finance, but also in those that have been relatively conservative to virtualization and cloud computing.
For instance, local energy businesses GS Energy and Korea East West Power Co.; educational organizations Jeju National University and Daegu Science High School; and medical institutions the National Cancer Center and International St. Mary’s Hospital have embraced the new technologies.
This is because cloud computing can help business innovation by allowing companies to react to rapidly-changing business conditions and to quickly adopt new IT infrastructure without significant up-front costs. Consequently, Korean enterprises started to recognize cloud computing as a “business enabler” and “speed-to-market” facilitator for its ability to drive business agility.
Also, there have been a series of outages in datacenters used by crucial infrastructures, caused by disasters, and they triggered a failure of IT functions at businesses. This made many companies consider equipping themselves with highly automated disaster recovery strategies, leveraging the benefits of cloud computing.
For this reason, the size of the domestic cloud market continued to grow.
According to the KT Economics Research Institute, the domestic cloud market reached about $890 million this year. This is a $230 million increase from the previous year and the domestic market is expected to grow further to $1.1 billion.
From virtualization to hybrid cloud
Hybrid cloud computing has become more popular this year as the enterprise environment gets more complex and heterogeneous.
Many IT divisions in businesses have been dependent on particular off-the-shelf hardware vendors. But this will no longer be effective. Instead, enterprises will need to use multiple cloud technologies spread among multiple environments.
With the high demand for flexibility and the changing business landscape, the convergence of cloud computing is expected to continue taking place, further increasing the need for a hybrid cloud next year.
By utilizing an optimal cloud strategy, companies will be able to rapidly implement new IT services and applications to meet business needs in a secure environment; dynamically restructuring the business as it grows; and yet in a cost-effective manner.
Software-defined datacenters at forefront
A software-defined datacenter, which uses virtualization and cloud technology, also came to the IT industry’s attention this year.
As the Korean IT environment has evolved, concerns have risen on how to proactively adopt technologies to build better products and to enhance market competitiveness.
The software-defined datacenter was one of the answers. Its computation, storage, network and security are all virtualized and are available via private, public as well as hybrid cloud platforms. This is considered ideal for remote offices or branch offices for all industries including financial institutions, government agencies, healthcare, education and retail businesses.
VMware CEO Pat Gelsinger said, “With a software-defined data center, organizations can reduce capital expense costs for commercial hardware by up to 49 percent and increase staff productivity by 100 percent.”
According to global market researcher IDC’s report titled “Datacenter Economies Index,” the positive economic impact that the adoption of server virtualization by businesses in Korea is expected to bring by 2020 is estimated at $5.9 billion.
We can expect that more Korean enterprises as well are expected to consider cloud computing and software-defined datacenters to drive business benefits and boost efficiency, control and agility as a part of transition to the mobile cloud era.
IT departments in Korean companies are challenged to provide services faster than ever while reducing costs. Undoubtedly, next year is expected to be a tipping point for cloud computing in the Korean market, with anticipation that the discussion agendas of mobile and hybrid cloud computing will become more likely.
Also, the trend of software-definition will prove to be more disruptive to the existing datacenters than anyone expects.
The writer is VMware Korea CEO