A recent study shows South Korea’s cloud market has the potential to significantly contribute to the country’s gross domestic product, but cybersecurity, regulatory, and high migration costs are holding it back.
Commissioned by British global management consulting firm ‘Analysys Mason,’ South Korea’s Digital Industry Policy Association published a report on July 26 focused on the economic impact of cloud services in Korea. The report found the domestic cloud industry is to contribute 62 trillion won (US$ 48.7 billion) to South Korea’s GDP over the next five years.
Although South Korea has great economic potential and high-quality broadband infrastructure, the adoption rate of cloud among industries was relatively low compared to other OECD countries. The percentage of South Korean companies that purchased cloud services in 2020 was merely 25%, ranking 31st among the 38 OECD member countries.
The research pointed to the lack of cybersecurity, high costs associated with the migration to cloud services, the high cost involved with disposing of existing hardware, and strong regulations as the main reasons for the low level of cloud adoption.
Earlier this month, South Korea’s National Intelligence Service revealed it found North Korean hackers stole around 1,000 credit card information of South Koreans stored in the cloud. The hackers logged into email accounts and accessed the cloud data box to obtain photographs detailing credit cards that revealed the card’s number, expiration date, and CVC number.
Despite these hurdles, IDC projects South Korea’s public cloud software market to surpass 3 trillion won (US$ 2.35 billion) by 2026. The market size surpassed 1.78 trillion (US$ 1.4 billion) in 2022, up by nearly 20% from the previous year.