Investing in Tomorrow: South Korea Commits US$ 91.5 Million to Cloud Computing
Cloud computing delivers computing services over the internet, including servers, storage, databases, networking, software, analytics, and intelligence. It promotes faster innovation, flexible resource allocation, and economies of scale. Moreover, it offers numerous advantages, such as cost efficiency, mobility, scalability, reliability, and automatic software updates, among others.
Cloud computing encompasses various types of services, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). It finds applications across various sectors such as healthcare, media and entertainment, energy and utilities, banking, financial services and insurance (BFSI), IT and telecom, government, and the public sector, among others.
The demand for cloud computing services is rapidly increasing in South Korea, driven by government investments, rising cybersecurity threats, and increasing digitalization initiatives.
In 2024, the South Korean Ministry of Science and ICT introduced an ambitious plan to invest US$ 91.5 million to bolster the local cloud computing industry, representing a significant increase of US$ 12.9 million from the previous year's budget allocation. Out of this investment, approximately US$ 18.1 million will be directed toward the development and commercialization of cutting-edge cloud services. Another US$ 6.0 million will be allocated to facilitate the transformation of traditional software into SaaS models, while about US$ 5.3 million will be invested in nurturing cloud-based Software as a Service (SaaS) solutions. An innovative fund of approximately US$ 15.1 million has also been earmarked to foster the growth of SaaS ventures, demonstrating the Government's commitment to nurturing innovation in this critical sector.
Rising Demand: Exploring the Drivers of South Korea's Cloud Computing Boom
According to a study by IMARC, the South Korean cloud computing market is projected to reach US$ 10.6 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 13.0% during the period from 2024 to 2032. This robust growth presents a significant opportunity for businesses and investors to capitalize on the expanding market. The key factors contributing to the growth of the market are outlined below:
Government Initiatives: The Government of South Korea is undertaking various initiatives to promote the cloud computing market across the country. Apart from the US$ 91.5 million investment to boost the adoption of cloud computing, the Government is also providing tax benefits and financial grants to enterprises that adopt cloud computing solutions.
Rapid Digitalization and Technological Advancement: The increasing trend of remote working requires reliable and secure access to data and applications from anywhere. Furthermore, the rapid digitalization of businesses is also driving the demand for flexible IT solutions, including cloud computing, in the country. In addition to this, the evolution of cutting-edge technologies like big data and machine learning is driving the demand for robust computing capabilities. Cloud services facilitate the rapid deployment of applications and resources, empowering businesses to remain competitive in a rapidly evolving digital environment.
Cloud Computing in the Healthcare Sector: Cloud computing enables healthcare providers to securely access patient records, diagnostic images, and other critical data from anywhere, facilitating better collaboration among healthcare professionals and improving patient care. Moreover, the shift toward telehealth and remote patient monitoring has accelerated due to the COVID-19 pandemic. Cloud-based platforms enable virtual consultations and remote monitoring of patients, thereby propelling the cloud computing market forward.
Increasing Demand for Digital Education and E-Learning: E-learning platforms utilize cloud-based infrastructure over dedicated servers due to the diverse benefits offered by cloud services, such as interactive learning content, resource availability, cost-efficiency, data backup, and reduced need for internal IT support. Moreover, the South Korean Government is actively promoting e-learning through various initiatives.
In 2023, the Ministry of Education (MoE) introduced the "Digital-based Education Innovation Plan," which aims to implement AI-driven digital textbooks by 2025, initially focusing on Math, English, and information-related subjects. This plan emphasizes the integration of human teachers with AI assistants to deliver personalized lessons. Furthermore, the Government plans to establish 300 Digital Leadership Schools across seven education offices.
Rising Cybersecurity Threats: South Korea is a prime target for cyberattacks due to its high degree of network connectedness, widespread use of mobile devices, and significant intellectual property. According to a report published by the National Intelligence Service, South Korea experienced an average of 1.2 million hacking attempts per day in 2022. Cloud computing services provide encryption, access controls, and centralized platforms to protect sensitive data. Moreover, they offer features like real-time threat detection, automated updates, and secure storage, empowering organizations to efficiently protect their data and systems against evolving cyber threats. The increase in cyberattacks in South Korea is expected to drive the cloud computing market in the country.
Emerging Trends in Cloud Computing: Exploring South Korea's Latest Innovation
- In February 2024, the South Korean Government announced plans to launch cloud services utilizing domestically developed quantum computers and to conduct test flights of urban air mobility (UAM) vehicles in Seoul metropolitan areas in this year. Under this initiative, the Government aims to introduce cloud services based on native 20-qubit quantum computers for public use in the second half of 2024. Additionally, it plans to commence technology development for a more advanced 50-qubit computing system by 2026.
- In January 2024, IBM collaborated with Korea Quantum Computing (KQC) to provide advanced AI software, infrastructure, and quantum computing services. KQC will maintain access to IBM's global fleet of utility-scale quantum systems via the cloud. Furthermore, IBM and KQC aim to install an IBM Quantum System Two at KQC's site in Busan, South Korea, by 2028.
- In October 2023, Amazon announced plans to invest around US$ 5.88 billion in South Korea's cloud computing infrastructure by 2027. This investment is a response to increasing competition among various cloud computing providers in the South Korean market.
Enhance Your Insights: IMARC's Expert Analysis for Unlocking Market Potential
Companies need to establish goals for developing new and innovative cloud computing services. It is essential for them to analyze their existing services and identify areas where technological advancements can enhance the development of cloud computing services for an improved user experience.
At IMARC Group, we specialize in assisting companies through market research in identifying the latest trends, business strategies, and product opportunities. We help organizations in the cloud computing market find their target audience, understand their preferences and purchasing behavior, and create powerful marketing plans. We provide information on new product launches, innovation, and recent trends and developments to assist businesses in positioning themselves for long-term success and growth.
