A data center with rows of different communication equipment (123rf)
A data center with rows of different communication equipment (123rf)

Major Korean companies are strengthening their partnerships with global cloud service providers such as Amazon Web Services and Microsoft, aiming to enhance their role in the cloud managed services market here and abroad, said industry sources Saturday.

The domestic managed service provider, or MSP, market has traditionally been led by mid-sized firms such as Megazone Cloud and Bespin Global, with others like GS Neotek and Metanet Tplatform rapidly increasing their market share.

The relative absence of large firms in this sector can be attributed to the fact that cloud services have been available in the country for less than a decade, leaving an immature market.

However, the recent landscape has changed significantly as both private companies and public institutions increasingly adopt artificial intelligence services that require cloud infrastructure. The ability to leverage existing IT consulting expertise and solution development capabilities without significant facility investments has also encouraged large companies to enter the market.

According to research firm Gartner, the global MSP market is expected to grow at an annual rate of 21.2 percent, reaching $100.3 billion by 2026. The Korean MSP market was valued at 7 trillion won ($4.76 billion) in 2023 and is projected to reach 12 trillion won by next year.

Traditional IT service companies affiliated with major conglomerates, such as Samsung SDS, LG CNS and SK C&C, which previously entered the MSP market, are also expanding their businesses, positioning the MSP sector as a key growth driver.

CJ OliveNetworks has been strengthening its partnerships with cloud service providers, or CSPs, such as AWS and Naver Cloud. It recently obtained the AWS’ devops consulting competency certification, enabling it to optimize various stages of the software development lifecycle and provide professional cloud services.

The digital service firm has also secured certifications like Naver Cloud’s serverless master and support master, enhancing its MSP capabilities and expanding its external business footprint beyond its affiliates.

Telecom carrier KT is also making strides in the MSP sector, leveraging its strategic partnership with Microsoft established in September. The company recently created a dedicated MS business division to bolster its MSP operations. While initially focusing on internal projects, KT has left room for potential expansion into external markets.

Similarly, Hyundai AutoEver has obtained AWS’ premier tier partner status, enabling it to modernize applications and deliver customized solutions to its clients more efficiently.

Although the market is rapidly expanding, sources said that securing initial profitability is challenging due to high initial investment costs and heavy reliance on cloud service providers from major US Big Tech companies.

As large companies bolster their MSP operations, established players such as Megazone Cloud and Bespin Global are also stepping up their efforts for initial public offerings to fuel their growth. Megazone Cloud has engaged Samsung Securities and JPMorgan as underwriters, aiming for a 2026 IPO, while Bespin Global plans to go public within the next one to two years.

These companies are also focusing on profitability by developing proprietary solutions. Megazone Cloud has introduced offerings like GenAI360 v2, which supports the adoption of generative AI, and Megazone Pops, a software-as-a-service management platform. Meanwhile, Bespin Global provides its in-house cloud management solution, OpsNow360, to its clients.

“In the MSP market, experience and the level of collaboration with global CSPs are crucial. While the entry of large firms may not drastically alter the competitive landscape, the growing demand for cloud services highlights the need for companies to work together to expand the market,” an industry source, who asked for anonymity, said.