Kakao's meltdown raises big questions about its management

Economy

Published: 16 Oct. 2022, 16:40 Updated: 16 Oct. 2022, 17:05

Kakao's meltdown raises big questions about its management

Fire fighters at SK C&C data center in Pangyo, Gyeonggi, on Saturday. Kakao services completely shut down on Saturday due to a fire that broke out at SK C&C, which housed Kakao’s data center. Only partial services were back online Sunday. [NEWS1]

Kakao's meltdown lasted more than a day, raising questions about Korea’s leading IT company's tech expertise and crisis management abilities.

President Yoon Suk-yeol's office on Sunday said Kakao's network disturbance could even be a threat to national security.

According to Kakao, basic services including text messaging via Kakao Talk, were restored Sunday after a fire Saturday at an SK C&C data center that housed the company’s data center. Kakao Talk is Korea's leading messenger service and many people rely on it and other Kakao apps like a mobile payment service and navigation system.

But it was uncertain when all services would be back up.

“We weren’t prepared enough for a crash of an entire server system from a fire,” said Yang Hyun-seo, Kakao vice president, who visited the scene of the fire at SK C&C in Pangyo, Gyeonggi, on Sunday. “There is some difficulty as it is the first time in the history of IT in which 32,000 servers were shut down.”

“So far we have been able to restore 12,000 among the 32,000,” Yang said. “It is taking a lot of time to transfer traffic to additional servers.”

All Kakao services crashed after a fire broke out at SK C&C in Pangyo after 3 p.m. Saturday, which housed Kakao’s data center.

Some Naver services were affected as well but not as extensively as for Kakao.

An automatic parking payment system at a parking lot that uses Kakao T, the mobility affiliate of Kakao, in Seoul on Sunday notifies customers that it is out of service due to the fire at SK C&C, which houses Kakao's data center, on Saturday. [YONHAP]

According to Kakao, some basic services such as text messages were back online by 1 a.m. Sunday morning, although not all users could log in. Services like transferring images and video remained unavailable.

An outage of at least 10 hours was the longest in the company's 12 years in business.

It took eight hours to put out the fire, or around midnight Sunday morning. While the cause of the fire has yet to be determined, the Gyeonggi police suspect faulty electrical wiring.
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On Sunday, police said they suspect the fire started in a room that stored batteries on the third basement floor of the building.

President Yoon on Sunday ordered the Minister of Science and ICT to take charge of crisis management for the Kakao meltdown.

“I feel a heavy responsibility for the inconvenience and damages that the people are going through,” Yoon said through a spokesperson.

He said he ordered government departments to assist the IT companies including Kakao.

“Not only do we need to look into the exact cause as well as the damages, but we need to come up with a system that would handle such a situation as well as preventive measures,” Yoon said.

Science and ICT Minister Lee Jong-ho apologized for the Kakao service meltdown during a visit to the SK C&C data center in Pangyo on Sunday.

“The government is looking at the situation seriously as [the meltdown] has raised concerns about the possibility of our society and economy being paralyzed,” Lee said.

He asked Kakao and Naver to work on strengthening their basic fundamentals to provide “stable” services that have a huge impact on people’s lives.

On Saturday, Kakao released a statement in the name of CEOs Namkoong Whon and Hong Eun-taek in which they promised swift action.

The CEOs said while the fire was gotten under control, the restoring of services had been delayed as the SK C&C data center power had to be turned off for safety reasons.

They claimed that all data was divided into different data centers within the country and that it had a backup system for emergencies.

Kakao has been providing information on its restoration updates through Facebook and Twitter.

The damage from the data center fire wasn’t only limited to Kakao’s messenger app, which is the most dominant in the country with over 47 million users, or 90 percent of the Korean population.

Most Kakao services require a Kakao messenger ID. With Kakao Talk down, other services like Kakao Pay went down with it.

Starbucks gift coupons sent and received through Kakao messengers were also halted.
E-commerce delivery notifications sent by Kakao messenger were completely stopped.

Companies that used the messenger for advertising were also affected.

The only service that wasn’t affected was Kakao Bank, which uses LG CNS data center in Sangam, Seoul.

Unlike Kakao, Naver has its own data center in Chuncheon.

Naver is also setting up another data center in Sejong, which is scheduled to go online in the first half of next year.

Kakao currently uses two data centers: SK C&C in Pangyo and KT’s in Mok-dong, Seoul.

The company is planning to open its own data center in Ansan in 2023.

Kakao is the leading IT platform in the country ranking 15 among conglomerates, according to the Fair Trade Commission, with total assets of 32.2 trillion won ($22 billion).

Naver ranked 22nd with total assets of 19.2 trillion won.

BY LEE HO-JEONG, KIM JUNG-MIN [lee.hojeong@joongang.co.kr]