Local start-ups make leaps into the cloud market

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Local start-ups make leaps into the cloud market

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More local start-ups are moving their operations to the cloud, as companies discover the option saves both time and money.

In January, food delivery app Baemin began experimenting with handling product development and customer service through a cloud server.

“The results are very satisfying,” said Kim Bong-jin of Woowa Brothers, the operator of Baemin. “By the first half of next year, we plan to use the cloud on all of our systems.”

Since introducing cloud computing, Woowa Brothers has cut their development expenses in half, and their lead time, the time it takes to go from planning a product to commercializing it, has been trimmed by 30 percent.

Cloud computing is now viewed so favorably that it is considered a necessity rather than an option for local start-ups. The practice involves companies using their information technology infrastructure such as servers and databases through the internet.

The costs of usage depend on the length of time and amount of data used. As a result, start-ups can reduce costs and save time through cloud computing, making it a popular option for many enterprises.

Several Korean companies have successfully moved their operations to the cloud, including Drama & Company, which developed Remember, an app that looks after business cards, and VCNC, which operates an app called Between, where couples can share comments and photos privately.

“When using the relational database management system, it is important to have a good failover plan [switching to a backup computer system when the active one fails],” said Lim Se-joon, chief technology officer of Drama & Company. “But the cloud automatically sorts out failover, so we have managed to dramatically reduce our database maintenance costs.”

“After introducing the cloud, changing the architecture [the organization of a computer system’s hardware and software] of our system has become so much easier,” said Kim Myung-bo of VCNC.

Other Korean companies using cloud computing include MangoPlate, an app for finding recommended restaurants; IGAWorks, which provides mobile advertising; and Zigbang, which operates a real estate app.

The cloud market is expanding as more companies adopt the practice. In 2014, the Korean cloud market was worth 523.9 billion won ($476.6 million), but this figure rose sharply to 766.4 billion won in 2015. On average, the market has been increasing by an impressive 20 percent each year ever since its inception.

The government is giving a helping hand to boost the cloud market. The Ministry of Science, ICT and Future Planning is planning to move the country’s information technology infrastructure into the cloud.

There is also tough competition between companies in the market. Amazon Web Services, Microsoft and IBM have recently bolstered their sales promotion strategies for start-ups, aware of the cloud market’s potential.

In January, Amazon Web Services established a data center in Seoul, and in May, the company added Edge Location, a platform for content delivery.

Microsoft recently released the BizSpark program, offering free access to its software for three years to 100,000 start-ups in 165 countries. Later this year, Microsoft will start a marketing strategy aimed at small businesses. It plans to expand its market share by providing cloud services as a package, including Office 365.

IBM is also bracing for competition and currently operating Catalyst, a program intended to help start-ups.

Korean companies have for many years simply watched overseas global companies penetrate the domestic market, but now they are vying for success by providing cloud services to the public sector, including the country’s central and local governments as well as public institutions.

Among local companies, KT’s progress with cloud computing has been the most notable. In 2010, it began offering individual cloud services. In September, it will build a hybrid cloud data center in Mokdong, western Seoul.

LG CNS formed a partnership with the National Information Society Agency in May to provide cloud services for big data, firewalls and enterprise research planning.

“We are going to penetrate the market by providing necessary services to the public sector and small partner companies,” an LG CNS spokesperson said.


BY CHO YONG-TAK, LEE CHANG-GYUN [ebusiness@joongang.co.kr]

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