Service providers welcome cloud promotion act

By Yoon Sung-won

Domestic and foreign cloud service providers hailed the passage of a bill at the National Assembly, Tuesday, which will allow public organizations to adopt private cloud computing services.

Because the act mainly covers deals with public agencies, domestic cloud computing service providers such as KT, Hancom, Fasoo, Innogrid and Daou Technology will likely benefit from it.

“The act is expected strengthen the competitiveness of domestic small- and medium-sized enterprises (SMEs) here, vitalizing investments and generating job opportunities,” a source from a domestic cloud computing service provider said. “The act’s passage was urgently needed because many SMEs have faced a crisis against aggressive marketing moves by global companies such as Microsoft, IBM and Hewlett-Packard.”

KT, the nation’s largest fixed-line operator, is expected be one of the biggest beneficiaries as it has operated a major cloud computing service since 2011 and has its own data centers in the country. The company can either provide its own service, which has been used by more than 6,000 companies here, or lend its data center capacity to other service providers.

Foreign powerhouses in the cloud computing industry such as Oracle, Microsoft, IBM and Amazon Web Service have also welcomed the act because it might encourage local businesses to adopt cloud computing services.

“We welcome the changes that the act will bring to the Korean market and we expect this will also help us do business here,” an official at a global cloud service provider said.

The bill was proposed at the National Assembly in October 2013 by the Ministry of Science, ICT and Future Planning to nurture the local cloud computing service industry and to protect customers. President Park Geun-hye also requested urgent passage of the bill because it is aimed at revitalizing the national economy.

But it has faced opposition and questions over security and excessive intervention by the National Intelligence Service.

With the cloud computing service, public organizations will be able to use various systems and services by connecting to a cloud data center and its network, free from the need to buy, establish and manage hardware and software systems. It is expected to save organizations time and money and give them more agility in applying additional services or systems.

The act is scheduled to come into effect in September and the ministry plans to urge up to 15 percent of public organizations to use private cloud computing services by 2017.

The ministry also predicted that the domestic cloud computing service market would expand more than three times to reach 1.6 trillion won by then, up from 523.8 billion won in 2014.

“The act will accelerate the adoption of cloud computing in the public sector,” said Lee Suk-joon, Vice Minister of Science, ICT and Future Planning, during a briefing Tuesday. “We will actively cooperate with the Ministry of Government Administration and Home Affairs and the Ministry of Strategy and Finance to come up with plans to introduce the service.”