South Korea Cloud Computing Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 5.52 Billion |
| Market Size (2029) | USD 16.08 Billion |
| CAGR (2024 - 2029) | 23.82 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
South Korea Cloud Computing Market Analysis
The South Korea Cloud Computing Market size is estimated at USD 5.52 billion in 2024, and is expected to reach USD 16.08 billion by 2029, growing at a CAGR of 23.82% during the forecast period (2024-2029).
South Korea's cloud computing market is witnessing rapid growth, fueled by the nation's robust technological infrastructure, proactive government initiatives, and a surge in digital transformation across diverse sectors. Enterprises, especially in IT, manufacturing, and financial services, are increasingly adopting cloud solutions. As the appetite for adaptable IT resources expands, cloud computing solidifies its role in South Korea's digital economy.
• As part of its overarching digital transformation agenda, the South Korean government is championing cloud adoption. Initiatives like the "K-Cloud Project" bolster the nation's cloud infrastructure, enhance data security, and advocate for cloud services in both public and private domains. This unwavering governmental support is pivotal in propelling the cloud computing market.
• In March 2024, the South Korean Ministry of Science and ICT announced a bold initiative, allocating KRW 121.9 billion (USD 91.5 million) to strengthen the domestic cloud computing sector in 2024. Acknowledging cloud technology's pivotal role in advancing artificial intelligence (AI), the ministry emphasized its crucial contributions in delivering substantial computing power and vast data storage solutions.
• With its cutting-edge IT infrastructure, marked by swift internet connectivity and a widespread embrace of 5G, South Korea lays a robust groundwork for cloud computing's ascent. The nation's tech prowess empowers businesses to harness cloud services adeptly, spurring broader adoption across sectors.
• South Korean enterprises are using cloud solutions to boost operational efficiency, curtail costs, and enhance scalability. Leading sectors like manufacturing, finance, and healthcare are harnessing cloud services for purposes ranging from data analytics to customer relationship management (CRM) and enterprise resource planning (ERP) systems.
• A notable trend in South Korea is combining AI and big data analytics with cloud computing. Companies are tapping into cloud platforms to roll out AI-centric applications and sift through vast datasets, fostering innovation and refining decision-making. This interplay of AI, big data, and cloud computing is the primary catalyst for the market’s growth.
• In March 2024, Amazon announced plans to invest KRW 7.85 trillion (around USD 5.88 billion) into South Korea's cloud computing infrastructure by 2027. This strategic decision comes as competition intensifies among cloud service providers in the South Korean market.
• Yet, amidst this swift cloud adoption, South Korea grapples with data security and privacy concerns. Industries such as finance and healthcare, where data breaches can have dire repercussions, tread cautiously when it comes to cloud-stored sensitive information. Thus, implementing stringent security measures and adhering to data protection regulations becomes paramount to navigating these challenges.
South Korea Cloud Computing Market Trends
Government Initiatives to Promote Cloud Adoption to Drive the Market
- As part of its broader National Cloud Strategy, the South Korean government initiated the K-Cloud Project. This initiative seeks to establish a strong domestic cloud infrastructure, encouraging public and private sectors to embrace cloud technologies. The project allocates funds to cloud service providers, enhancing their services and motivating businesses to transition their IT systems to the cloud. The government is spurring innovation and widespread adoption across various industries by cultivating a competitive cloud market.
- In June 2023, the South Korean Ministry of Science and ICT (MSIT) allocated KRW 100 billion (~USD 76.5 million) for the inaugural phase of the K-Cloud Project. This funding aims to enable South Korean data centers to adopt domestically produced artificial intelligence semiconductors by 2030.
- South Korea's government has rolled out policies mandating public sector organizations to adopt cloud services. This initiative encompasses migrating government data centers and IT systems to cloud platforms. Introduced in 2015, the "Cloud First Policy" mandates that government agencies prioritize cloud services for updates or new IT system deployments. As a result, there has been a surge in cloud technology adoption within government entities, and this move has also paved the way for the private sector to follow suit.
- In recognition of the critical role data security plays in cloud adoption, the South Korean government has instituted and actively promotes rigorous cloud security standards. The Korea Internet & Security Agency (KISA) has rolled out the Cloud Security Assurance Program (CSAP), certifying cloud service providers that adhere to defined security benchmarks. By upholding these elevated security standards, the government directly addresses a primary concern for businesses transitioning to the cloud, thus bolstering trust and encouraging wider adoption.
- A 2023 survey by the Korea Information Society Development Institute (KISDI) revealed that approximately 69% of South Korean respondents frequently utilized Naver's NDrive as their cloud service of choice. Following NDrive, Google Drive and Apple iCloud garnered about 28% and 19% usage, respectively. Naver Cloud, a subsidiary of Naver - South Korea's predominant search portal - provides a suite of IT platform services, encompassing storage solutions, IT infrastructure consulting, data center operations, networking, and security services.
IT and Telecom to Hold a Major Share of the Market
- South Korea's telecom industry is rapidly transforming digitally. Major players, including SK Telecom, KT Corporation, and LG U+, are weaving cloud computing into their core operations. By harnessing cloud technology, these firms boost network efficiency, cut operational costs, and roll out advanced offerings like 5G, the Internet of Things (IoT), and AI-driven applications. As these services demand scalable and flexible cloud solutions, the telecom sector is channeling substantial investments into cloud infrastructure.
- For instance, in August 2024, SK Telecom partnered with Lambda, a GPU cloud company founded by AI engineers, to collaborate in the AI cloud business. The two firms plan to set up a substantial NVIDIA GPU cluster to bolster AI cloud ventures in South Korea. SKT and Lambda will install these NVIDIA GPU clusters by year-end at SK Broadband’s Gasan data center in Korea. This setup will utilize Lambda’s cloud computing platform, which is enhanced by NVIDIA technology.
- As a frontrunner in global 5G deployment, South Korea recognizes the pivotal role of cloud computing in ensuring the success of its 5G networks. Telecom giants are tapping into cloud technology to navigate the intricate infrastructure demands of 5G, which encompasses virtualized network functions and edge computing. With cloud computing, telecom operators can adeptly manage the vast data influx from 5G applications, fine-tune network performance, and deliver services with minimal latency. This surge in cloud adoption is propelling significant growth in the telecom sector's cloud market.As of March 2024, South Korea boasted around 33.4 million 5G subscribers, as reported by the Ministry of Science and ICT (South Korea). South Korea rolled out commercial 5G services in April 2019, and the subscriber count has consistently risen since then.
- In South Korea, the IT and telecom sectors are in charge of the development and deployment of IoT and AI technologies. Cloud computing is pivotal in processing and analyzing the massive data influx from IoT devices and AI applications. Notably, telecom companies leverage cloud platforms to provide businesses with IoT connectivity services and AI-driven analytics. As a result, the demand for cloud infrastructure to bolster these technologies is poised to bolster the market share of both the IT and telecom sectors.
South Korea Cloud Computing Industry Overview
The South Korean cloud computing market is fragmented, with major players like Amazon Web Services, Google LLC, etc. Players in the market are adopting strategies such as partnerships and acquisitions to enhance their product offerings and gain sustainable competitive advantage.
South Korea Cloud Computing Market Leaders
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Alibaba Group Holding Limited
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Amazon Web Services (AWS)
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Google LLC
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IBM Corporation
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Microsoft Corporation
*Disclaimer: Major Players sorted in no particular order
South Korea Cloud Computing Market News
- June 2024: South Korean telecom giant KT Corp. partnered with Microsoft to bolster the local artificial intelligence (AI) and cloud computing sectors. Together, they will spearhead collaborative AI and cloud research initiatives.
- May 2024: Korean Air partnered with Amazon Web Services (AWS) to create an AI Contact Center (AICC) platform. This initiative leverages artificial intelligence (AI) technologies to enhance Korean Air's customer service capabilities. The AICC, a cloud-based platform, utilizes AI-driven voice bots and chatbots to address customer inquiries.
South Korea Cloud Computing Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
- 4.1 Market Overview
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4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Threat of New Entrants
- 4.2.4 Threat of Substitutes
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Industry Regulations and Standards
- 4.4 Number of Data Centres in South Korea
- 4.5 Case Study Analysis
- 4.6 Technology Landscape
5. MARKET DYNAMICS
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5.1 Market Drivers
- 5.1.1 Increasing Adoption of Digital Technologies
- 5.1.2 Government Initiatives to Promote Cloud Adoption
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5.2 Market Challenges
- 5.2.1 Threat of Data Breaches and Cyber Attacks
6. MARKET SEGMENTATION
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6.1 By Type
- 6.1.1 Public Cloud
- 6.1.1.1 IaaS
- 6.1.1.2 PaaS
- 6.1.1.3 SaaS
- 6.1.2 Private Cloud
- 6.1.3 Hybrid Cloud
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6.2 Organization Size
- 6.2.1 SMEs
- 6.2.2 Large Enterprises
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6.3 End-user Industries
- 6.3.1 Manufacturing
- 6.3.2 Education
- 6.3.3 Retail
- 6.3.4 Transportation and Logistics
- 6.3.5 Healthcare
- 6.3.6 BFSI
- 6.3.7 Telecom and IT
- 6.3.8 Government and Public Sector
- 6.3.9 Other End-user Industries (Utilities, Media & Entertainment, etc.)
7. COMPETITIVE LANDSCAPE
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7.1 Company Profiles
- 7.1.1 Amazon Web Services (AWS)
- 7.1.2 Google LLC
- 7.1.3 IBM Corporation
- 7.1.4 Microsoft Corporation
- 7.1.5 Salesforce.com, Inc.
- 7.1.6 SAP SE
- 7.1.7 Naver Cloud
- 7.1.8 Kakao Enterprise
- 7.1.9 KT Cloud
- 7.1.10 LG CNS
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE MARKET OUTLOOK
** Subject To AvailablitySouth Korea Cloud Computing Industry Segmentation
Cloud computing provides on-demand access to computer resources, particularly data storage and processing power, without requiring direct management by the user. Computing resources, including physical and virtual servers, data storage, networking capabilities, application development tools, software, and AI-powered analytics, are now accessible over the Internet with a pay-per-use pricing model.
The report covers South Korean cloud computing companies and the market, which is segmented by type (public cloud (IaaS, Paas, and Saas), private cloud, hybrid cloud), organization type (SMEs, large enterprises), end-user industries (manufacturing, education, retail, transportation and logistics, healthcare, BFSI, telecom and IT, government and public sector, and other end-user industries (utilities, media & entertainment, etc.)). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Type | Public Cloud | IaaS |
| PaaS | ||
| SaaS | ||
| By Type | Private Cloud | |
| Hybrid Cloud | ||
| Organization Size | SMEs | |
| Large Enterprises | ||
| End-user Industries | Manufacturing | |
| Education | ||
| Retail | ||
| Transportation and Logistics | ||
| Healthcare | ||
| BFSI | ||
| Telecom and IT | ||
| Government and Public Sector | ||
| Other End-user Industries (Utilities, Media & Entertainment, etc.) |
South Korea Cloud Computing Market Research FAQs
How big is the South Korea Cloud Computing Market?
The South Korea Cloud Computing Market size is expected to reach USD 5.52 billion in 2024 and grow at a CAGR of 23.82% to reach USD 16.08 billion by 2029.
What is the current South Korea Cloud Computing Market size?
In 2024, the South Korea Cloud Computing Market size is expected to reach USD 5.52 billion.
Who are the key players in South Korea Cloud Computing Market?
Alibaba Group Holding Limited, Amazon Web Services (AWS), Google LLC, IBM Corporation and Microsoft Corporation are the major companies operating in the South Korea Cloud Computing Market.
What years does this South Korea Cloud Computing Market cover, and what was the market size in 2023?
In 2023, the South Korea Cloud Computing Market size was estimated at USD 4.21 billion. The report covers the South Korea Cloud Computing Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the South Korea Cloud Computing Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
South Korea Cloud Computing Industry Report
Statistics for the 2024 South Korea Cloud Computing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. South Korea Cloud Computing analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
