[ET NEWS] Google plans to establish a data center in Korea next year in a bid to expand its foothold here, according to sources on Oct. 16.
The move is also aimed at better competing with rivals Amazon and Microsoft, which have been successfully increasing their market share by having their own full-fledged data centers.
Google has reportedly announced its plans for the new data center in Seoul to its business partners.
The tech giant also plans to open data centers in Zurich and Osaka. Earlier this year, it announced it would build new data centers in Hong Kong and Los Angeles.
The Seoul data center is believed to be part of its efforts to beef up its cloud business in the Asia-Pacific region.
Amazon Web Service and Microsoft have been operating data centers in Korea for several years.
In addition, Korean conglomerates such as Samsung Electronics, LG Electronics, Amorepacific and Shinhan Bank have been actively adopting cloud services. More public organizations and financial institutes are expected to do so thanks to relaxed regulations.
The financial authorities are preparing a new set of laws that allow financial companies to handle private information of their customers on cloud services.
Market research firm Gartner forecast that Korean companies will spend 3.44 trillion won (US$3.05 billion) for cloud services in 2021, up from 2 trillion won this year.
Rising calls by customers for establishing a data center in Seoul has also pushed Google. Currently, Korean companies that currently utilize its new cloud services, such as big data analytics solution BigQuery, have to access data centers in Japan and elsewhere, which can cause inefficiencies.
Google started the project to build a data center earlier this year while negotiating with network operators to fine-tune details, including the location and size.
Software giant Oracle is also expected to build a data center in Korea soon, upping the ante in the local market.
Some market watchers said that local cloud service firms would have to brace themselves for heated competition in the market.
“Competition with global cloud giants is now inevitable and local companies may have to focus on nurturing experts and developing cutting-edge technologies,” said Kim Young-hoon, vice chairman of Korea Association of Cloud Industry, emphasizing the importance of the government’s support for local cloud firms.
By Kim Ji-seon (email@example.com) Park Jong-jin (firstname.lastname@example.org)
This story was co-produced by ET News and The Investor. For any inquiries, contact the editor Lee Ji-yoon at email@example.com