[Post-Covid-19 New Normal] Covid-19 speeds up Korea’s migration to the cloud

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[Post-Covid-19 New Normal] Covid-19 speeds up Korea’s migration to the cloud

K-pop boy band BTS appeared on stage last week at a huge virtual concert with the faces of hundreds of fans — many of them waving their signature Army Bomb light sticks — appearing live from around the world on an array of screens behind them.
The success of this global concert was thanks not only to BTS's popularity, but also to cutting-edge cloud computing technology combined with an advanced teleconference platform.

To ensure a stable real-time video connection between the group and their fans, KT transmitted a massive amount of data at a transfer rate of 1 gigabyte per second, backed by 24 virtual machines. 
The tech-driven concert shows how the coronavirus pandemic has pushed cloud technology to the next level — and on a whole new scale.  
With remote working and online classes becoming the “new normal,” the demand for cloud services is sharply rising since the technology allows for the delivery of on-demand computing services over the internet without additional costs to build and maintain data centers.
The coverage of the service ranges from applications and software to storage and processing power, which means connected users can access certain platforms or data storage capacity wherever they are.
Korea has taken a conservative approach to cloud computing services in the past, primarily due to the complexity of aligning the existing tech infrastructure with cloud.
The sudden outbreak of the coronavirus, however, has turned the cloud from desirable to indispensable, prompting industry players in finance, health care and manufacturing to tap into the technology.
Fans’ faces appear behind BTS during the BTS Map of the Soul ON:E concert on Saturday. [BIG HIT ENTERTAINMENT]

Fans’ faces appear behind BTS during the BTS Map of the Soul ON:E concert on Saturday. [BIG HIT ENTERTAINMENT]

Surging demand
Multiple cloud service providers from Korea and abroad testified that they have seen a new wave of growth since the coronavirus outbreak as companies rushed to the cloud to better protect data or provide business communication platforms online.
The number of monthly active users for Microsoft Teams, a proprietary collaboration tool, increased a whopping 450 percent between October in 2019 and August this year in Korea, according to Microsoft Korea.
Telecom operator KT said that its cloud business has received dozens of new college clients this year as they rush to facilitate large-scale online classes in the aftermath of the pandemic.
“In line with the accelerated adoption of online courses at colleges, about 60 universities including Ewha Womans University, Sungkyunkwan University and Chung-Ang University have been newly registered with KT’s cloud service,” said Kim Joo-sung, vice president at the company.
“The existing college servers require additional costs to regularly upgrade infrastructure and still come with limited storage,” he said in an email interview with the Korea JoongAng Daily, “But the cloud provides virtually unlimited storage to process online classes in a stable manner.”
NHN, another major cloud operator and gaming outlet, decided to offer its business communication tool Dooray! free of charge for small- and medium-sized companies in response to the surge in interest amid the outbreak.
“Many companies consider efficiency, resilience and flexibility the top priorities in the post-pandemic era,” said Sarah Park, a research manager at consultancy Korea IDC in a report released last month. "Cloud services fulfill all three qualities.”
Slow migration
This is all new territory for Korea. Before the pandemic, cloud computing systems were far from the mainstay here, despite the country's international reputation for being tech-savvy.
The percentage of enterprises purchasing cloud services stood at 22.7 percent in 2018, the latest date that data is available for from the Organisation for Economic Cooperation and Development (OECD), lower than the OECD average of 31.18 percent.
The low usage is attributed to tight regulations on data protection on top of the hassle of moving data into a new cloud infrastructure since the management of sensitive information containing individuals’ health or financial conditions should comply with a broad set of rules and criteria.
Against this backdrop, local tech firms were not as active in providing the service as the likes of Amazon, Google and Microsoft, allowing those international firms to take a dominant share of the local fledgling market.
Foreign operators including American tech companies claimed a combined market share of 67 percent in 2018, according to global market tracker IDC last year. Industry insiders believe that Amazon’s AWS stands as the top operator by market share in Korea with tens of thousands of paid clients.
IDC Korea estimated the size of Korea’s public cloud market to be 1.3 trillion won ($1.13 billion) in 2019, up 25.2 percent from the previous year.  
ITWorld Korea, a publication specializing in technology, projects the number will increase to 2.92 trillion won this year and further advance to 3.44 trillion won next year.
Hybrid approach
Naver Business Platform’s smart server farm in the company’s Chuncheon data center in Gangwon.[NAVER]

Naver Business Platform’s smart server farm in the company’s Chuncheon data center in Gangwon.[NAVER]

Local tech companies such as KT, Naver and NHN are trying to reorient the focus toward hybrid-style cloud computing storage, which they say will help companies smoothly transition to the cloud ecosystem by deploying both public and private clouds.
Public clouds are cloud environments primarily created from IT infrastructure owned by operators serving multiple customers. Private clouds, on the other hand, are solely dedicated to a single end user or group where the system typically runs behind the entity’s firewall.
So with a public cloud, like Google Drive, for example, all data and systems run from servers and storage in a Google facility somewhere. On a private cloud, all of the physical hardware that runs the cloud and stores the data is under lock and key in the company's own building.
A hybrid cloud is the compromise — cloud operators combine on-premises hardware and existing clouds so that sensitive applications can be kept inside the organization’s network and other information stored outside.
Naver launched its hybrid cloud service Neurocloud in July. It installs cloud data storage inside the company's existing facilities, or establishes a small data center from scratch. That data storage is then connected to Naver's public cloud.

Kim Tae-chang, who heads the Naver Business Platform unit, said that it is designed to offer a wide range of cloud-backed offerings.
“The biggest differentiator for Neurocloud is that it can provide platform and software as a service as well as infrastructure, whereas hybrid clouds run by foreign players are limited to infrastructure,” he said in an email interview with the Korea JoongAng Daily.
NHN carves out its own niche by basing its cloud service on an open source cloud called OpenStack.
Since many companies have already set up their own cloud system built on OpenStack, NHN’s cloud Toast is immediately compatible.
“OpenStack has the highest market share in the cloud management platform market,” said Kim Dong-hoon, director at NHN’s cloud business division. “The scalability and flexibility of OpenStack helps extend on-premises clouds or convert work onto the cloud.”
Penetrating regulated businesses
Local cloud service providers are searching for an edge over larger multinational competitors by focusing on areas considered unfavorable to their overseas rivals.
Targets include public corporations, financial institutions and medical centers as working with them requires cloud operators to comply with lengthy rules drawn up by each sector.
To provide cloud services for public institutions, a company must acquire the Cloud Security Assurance Program certification. Operators have to physically separate the servers, network and security equipment used by public institutions from those used by other clients.
KT stands out with 12 data centers across the country, holding around 70 percent of the market share for the public sector and finance, according to the company.
Naver, on the other hand, recently landed a series of landmark deals to establish cloud systems at health care centers such as Korea University Anam Hospital and Pusan National University Hospital.

BY PARK EUN-JEE   [park.eunjee@joongang.co.kr]
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