ICT ministry hit for allowing Amazon, Microsoft to enter public cloud market

The Korea Times

The Korea Times

Business

Sun, October 1, 2023 | 03:46

Tech

ICT ministry hit for allowing Amazon, Microsoft to enter public cloud market

Posted : 2022-12-30 16:19

Updated : 2022-12-31 08:59

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By Park Jae-hyuk

The Ministry of Science and ICT is facing a backlash for its latest decision to allow foreign tech giants to make inroads into Korea's public sector cloud computing service market, according to industry officials, Friday.

The ministry announced on Thursday that it will revise guidelines on security certifications of cloud computing services in order to introduce a classification system to the cloud security assurance program (CSAP).

Under the new guidelines, the systems of state-run institutions will be classified into three grades, depending on the data and information they handle.

As a result, companies that do not physically separate their cloud servers for the public and private sectors will also be able to provide cloud computing services to the public sector, if personal information and other confidential data are not involved.

Amazon Web Services (AWS), Microsoft and other U.S. tech firms have not established cloud servers for the public sector, according to their global headquarters' policies. KT, Naver, NHN and other domestic cloud service providers have therefore been able to dominate the public cloud market here, despite the dominance of foreign companies in the private sector.

Data compiled by the Fair Trade Commission showed that AWS has grown to account for nearly a 70 percent share of Korea's cloud computing service market over the past few years, while Microsoft accounts for around 10 percent. Google and Naver have vied for third place.

Against this backdrop, domestic companies have expressed concerns over the possibility of foreign firms gaining dominance even in the public cloud market, since the ICT ministry began to take steps in August to ease regulations on the security certification for cloud systems.

"U.S. firms can afford to offer excessively lower prices to win in competition with Korean companies," a local cloud computing company official said.

Rep. Yoon Young-chan of the main opposition Democratic Party of Korea (DPK) claimed that the ICT ministry's measure will threaten the survival of the domestic cloud computing industry.

"It is obvious that Korean firms will lose ground," he wrote on Facebook, informing of his plan to hold a conference on Jan. 16 to discuss better measures for the nation's cloud computing ecosystems.

Most developed countries have restricted foreign companies from providing cloud computing services to the public sector. Japan decided to use Japanese companies' services for government systems handling confidential information, although the country had once used the cloud services of U.S. firms for its public sector. The European Union has taken similar measures to protect data sovereignty.

pjh@koreatimes.co.kr