Market Trends of South Korea Data Center Storage Industry
IT & Telecommunication Segment to Hold Major Share in the Market
- Smartphones have always been an integral part of South Korean culture and lifestyle. The country consistently ranks among the populations with the highest smartphone ownership rates. The number of smartphone users is expected to rise from 11.73 million in 2021 to 55.5 million by the end of 2029. The Ministry of ICT and Science reported that approximately 10,000 TB of video content is consumed daily by South Koreans through smartphones and other mobile devices. The increase in data consumption has a positive impact on the growth of data centers in the country. This will increase the need for data storage and data center storage equipment, increasing the market value.
- As of December 2021, South Korea had approximately 48.3 million 4G subscriptions. At that time, the country recorded a total of 72.8 million mobile subscriptions. The number of 2G, 3G, and 4G subscriptions decreased throughout 2021, while the number of 5G subscriptions nearly doubled, rising from around 12 million to 20.92 million. The continued increase in the use of smartphones, with increasing adoption of 5G networks among users and increased data traffic, has given the telecommunications sector its dominance. It will have a positive impact on the growth of data centers in the country. This will increase the need for data storage and, thus, the need for data center storage equipment, thereby increasing market value.
- Data centers are critical to national security, the internet infrastructure, and economic performance. The country is experiencing rapid growth in its data center infrastructure, driven by a growing preference for the cloud and increased consumption and generation of data by increasing numbers of digital users. This increases the usage of data centers and, at the same time, increases the usage of storage devices in data centers, positively impacting the market.
- Data center workloads are also increasing due to the increasing demand for improved application performance, storage requirements, and mobile data usage due to the increasing number of applications and increased internet usage. As a result, more and more businesses around the world are moving to cloud data storage, increasing the demand for data center services. As a result, the use of data center storage is increasing in the country.
- An overwhelming majority of South Korea's population has access to the Internet owing to increases in government infrastructure and educational initiatives. With the government's timely and well-implemented internet policy, the country has gotten a big head start and continues to make progress. New infrastructure-sharing policies have been explicitly designed to reduce the cost of deployment and ensure that wireless competitors operate on an equal playing field. By allowing every wireless company to access fiber infrastructure at fair and reasonable rates, they are guaranteed fiber capacity to connect their 5G towers anywhere in the country. This will increase the number of data centers processing huge amounts of data, thereby increasing the use of data center storage equipment in the country.
Understand The Key Trends Shaping This Market
Download PDF
Hybrid Storage Expected To Hold Significant Share
- The combination of on-premises and cloud storage solutions is known as data center hybrid storage. This approach takes advantage of the best of both environments and provides the flexibility to store and manage data on-premises and in the cloud.
- Businesses are moving from public cloud to hybrid IT. Digital native businesses and media and gaming companies are major spenders on South Korea's public cloud market. Online gaming, e-commerce, and other fully digitized businesses that need to deliver the best possible online experience are seeing unprecedented demand, along with experimental games and features using augmented and virtual reality. For example, mobile game maker Netmarble Corp. is using smart analytics and machine learning to gain customer insights that help drive further innovation. It is also observed that a public cloud improves team productivity. The companies are growing businesses and providing adequate customer service, and hence, the requirement of storing and processing intense data creates the need for hybrid storage.
- Businesses are expanding and adapting to meet the growing connectivity needs of various industries and the increasing use of the internet. For instance, as of 2020, only 12.9% of South Korean companies used the cloud, less than half the OECD average of 30.6%. However, during the pandemic, the demand for the cloud increased significantly as many people turned to cloud solutions to continue schooling, working, and doing business as usual. Moreover, businesses increasingly rely on hybrid infrastructure and cloud capabilities as they seek flexibility, scalability, and remote work capabilities. Data traffic is also increasing, and thereby, the need for storage for businesses is increasing in importance, thus increasing the market value for hybrid storage solutions.
- Hybrid storage helps to effectively utilize storage, reduce the overall storage footprint, and optimize storage management. The growing demand for agile, cost-effective, and flexible computing is driving the demand for hybrid storage.
- Several service providers are deploying advanced storage solutions to ensure data availability and access in hybrid clouds. The companies offer optimized hybrid storage systems. For example, HPE GreenLake, an updated app and data product, also introduced platform upgrades and new cloud services in 2022. Therefore, this product portfolio is adopted by large enterprises with large data storage capacities. This demands hybrid storage in the country.
