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Naver disapproves of Korean firms' dependence on foreign cloud-service platforms

The internet company’s cloud business chief says “it is a shame” that Samsung is taking pride in to using AWS for cloud computing

CHUNCHEON, Gangwon Province -- South Korean internet giant Naver on Thursday criticized local conglomerates for relying too much on foreign cloud-computing services, urging the government to help preserve “data sovereignty” in the finance and public sectors.

During a meeting with reporters at its data center in Chuncheon, Gwangwon Province, Naver Business Platform CEO Park Won-ki said Samsung Electronics and other big companies have become overly dependent on global cloud-computing providers like Amazon.

“It’s such a shame that they are taking so much pride in using Amazon Web Service,” Park said, highlighting AWS’ past server failure in Korea. Some online retailers using AWS were inaccessible for several hours when its severs went down in November 2018. 

Naver Business Platform CEO Park Won-ki. Naver
Naver Business Platform CEO Park Won-ki. Naver

Samsung, LG Electronics and Lotte Group, along with a majority of Korean conglomerates, use AWS for cloud-computing services. Last year, Korean Air pledged to transfer most of its data to AWS by 2021.

Stressing such “overreliance” on foreign companies carries the risk of a data breach, he argued that companies should prevent foreign firms from storing critical information in the finance and public sectors.

Starting this year, the government has eased regulations on cloud services in the financial and public sectors. Financial institutions here had been banned from storing clients’ credit information on cloud-service platforms before the restriction was lifted in January.

“Every country is working hard to preserve their sovereign rights over data usage. Losing data is like losing sovereignty. … I’m hoping Korean conglomerates will join our efforts to protect those rights,” said Park.

Since establishing Naver Business Platform in April, 2017, Naver has been seeking to increase its presence in Korea’s cloud computing markets dominated by global players with advanced technology. 

Currently, about 80 percent of Korea’s could market is estimated to be dominated by AWS and Microsoft. The global companies’ share is expected to rise in a few years when Oracle and Google join the fray. Naver declined to reveal its market share and financial investment in the cloud market.

Naver is planning to expand its cloud service into public sectors this year as the government relaxed its regulations. NBP said it would release 10 different types of cloud services for government agencies.

“Our plan is to make every government agency’s website look like Naver homepages,” said Han Sang-young, who manages cloud service strategy at Naver. ”It would range from central agencies to regional municipalities.”

NBP said it has been releasing between four to six new products every month for the past two years since its launch in April, 2017. The total number of products and services has increased from 22 at the time of the company launch to 119 in 15 different categories, the company said.

According to the NBP, its revenue has doubled in the past year and will see at least two-fold growth this year. Since 2017, NPB’s revenue has amounted to 400 billion won ($351 million), Park of NBP said.

The company said it also plans to construct a cloud system tailored for finance in conjunction with Korea Securities Computer Corporation and prepare a “financial cloud zone” in Yeouido within the first half of this year.


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