S. Korea’s ICT ministry hit for allowing Amazon, Microsoft to enter public cloud market

South Korea’s Ministry of Science and ICT is facing a backlash for allowing foreign tech giants Amazon and Microsoft to penetrate the country’s public sector cloud computing service market.

Domestic companies such as KT, Naver, and NHN have expressed concerns over foreign firms dominating the public cloud market since the ministry took steps to ease regulations on the security certification for cloud systems.

The ministry will revise guidelines on security certifications of cloud computing services to introduce a cloud security assurance program (CSAP) classification system.

Under the proposed guidelines, companies that do not physically separate their cloud servers for the public and private sectors, such as Amazon and Microsoft, will also be able to provide cloud computing services to the public sector, if personal information and other confidential data are not involved.

Amazon, Microsoft, and other US tech firms have not established cloud servers for the public sector, allowing KT, Naver, NHN, and other domestic cloud service providers to dominate the public cloud market here, despite the dominance of foreign companies in the private sector.

Data compiled by the Fair Trade Commission showed that AWS has grown to account for nearly a 70 percent share of Korea's cloud computing service market over the past few years, while Microsoft accounts for around 10 percent. Google and Naver have vied for third place.

According to an official of a local cloud computing company, US firms can afford to offer excessively lower prices to win in competition with Korean companies.

Most developed countries have restricted foreign companies from providing cloud computing services to the public sector.