May 20, 2024

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In Korea, cash has been pouring into the local partners of public cloud infrastructure providers like Amazon Web Services over the past couple of years as more corporations migrate to the cloud system.

More companies are moving to cloud infrastructure to store data, enhance computing power and facilitate the monitoring, automation and management of the work environment.

Investors are now hoping this trend will reshape the regulatory landscape and lead to higher returns. 

In particular, attention is being paid to privately held cloud-managed service providers like Bespin Global and Megazone Cloud. In Feburary, Megazone Cloud received a combined 48 billion won (US$42.63 million) investment from four investors: Nau IB Capital, Korea Investment Holdings, Korea Development Bank and KB Investment. They have sealed a sales and purchase agreement with Megazone’s cloud system management arm to buy redeemable convertible preference shares issued by the company.

The series A round of investment came months after Megazone Cloud, Korea’s first AWS Premier Consulting Partner, announced a partnership with LG CNS, an information technology arm of the LG conglomerate. Megazone Cloud spun off in August 2018 from Megazone, which first partnered with Amazon in 2012. The company’s revenue more than doubled on-year to some 220 billion won in 2018.

Another Seoul-based cloud MSP, Bespin Global, had accumulated over 130 billion won in investment as of last year. Most recently, in October, Bespin announced a series B round investment worth 87 billion won led by DY Holdings. This follows a previous round of 47 billion won investment led by Singaporean investor ST Telemedia, a subsidiary of Temasek Holdings.

With foreign offices in Beijing and Dubai, Bespin Global was the only company in East Asia to be listed on Gartner’s Magic Quadrant for Public Cloud MSPs for two consecutive years until 2018.

Founded in 2015, Bespin Global has strengthened its MSP prowess, partly through a takeover of Seoul-based competitor Vsystems in an undisclosed purchase deal. 

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Alongside Megazone and Bespin, Korea is home to a handful of cloud MSPs including conglomerate-backed technology arms like Samsung SDS, GS Neotek and NDS Corporation. These cloud MSPs have teamed up with internet giants at home and abroad including Microsoft, IBM and Amazon Web Services to create and operate a public cloud system for clients.

At the same time, the Korean financial authorities are encouraging domestic financial institutions to use cloud infrastructure to boost cost efficiency and productivity, while also stressing the need for a regulatory framework to oversee cloud infrastructure MSPs.

By Son Ji-hyoung (consnow@heraldcorp.com)