Last January, South Korea-based SK Telecom announced the opening of a new cloud computing data center in Seoul with 1,500 cloud servers installed to deliver public cloud services to small and medium businesses (SMBs).
At the moment, SK Telecom’s public cloud computing market is yet to mature to become "a cash cow" for the company, according to Han Nam-Seuk, CIO of SK Telecom. "We accumulated technology through our R&D (research and development) investment," said Han. "With regard to the infrastructure, we are taking a conservative approach as it can be expanded with the increase of subscribers."
In an interview with Asia Cloud Forum, Han outlines the major deployments of cloud services for SMBs in 2011 and the estimated cost benefits, how businesses can reap operational benefits from "mobile cloud" adoption, and his three key lessons learnt about cloud computing including what he calls a "select and concentrate’ approach." Excerpts below:
Asia Cloud Forum: What were your key cloud service offerings and deployments in 2011?
Han Nam-Seuk: We launched a server hosting service named ‘T cloud biz’ in January 2011 for corporate customers (mainly SMBs). As the main product, we have cloud server (a public infrastructure-based server hosting service located at the SK Telecom Cloud Center) that enables customers to use server resources matching their specifications for a wanted period.
This allows SMBs to borrow servers at 20% less cost than the existing IDC (Internet data center) product. Without a cloud server, venture companies or one-person enterprises would have to pay heavy initial investment costs (Approximately KRW 10 million [US$8,707] instead of KRW 40,000-90,000 [US$34.8-US$78.3] per month) as they themselves have to purchase servers and consume a long period of time building the infrastructure (About two to three months instead of within a few hours).
Our target market segments include B2B (business-to-business) public cloud, B2C (business to consumer) public cloud and in-house private cloud.
With regard to public cloud for corporate customers, we are offering ‘T cloud biz’ that provides computing power like server and storage; cloud PC service that enables the use of diverse services within the company via many different types of devices; and FTA service that provides solution for authenticating the place of origin.
Second, we are providing T Cloud service for our general customers. This enables them to store and synchronize address books, photos and documents. Customers can store up to 10 gigabytes of data.
Third, we have been gradually integrating our in-house system into the cloud since 2008, thereby experiencing cost savings worth billions to tens of billions of won every year. Moreover, we are maintaining our technological edge by developing and applying core technologies such as distributed file system (DFS), cloud management solution and distributed computing, while at the same time focusing on R&D to offer differentiated services based on these core technologies.
How will you help IT/CIOs establish their business case for cloud computing/services deployment to their senior management?
Han: With the advent of cloud services, companies can offer various new cloud-type services that in turn create new relevant industries. Among them the mobile cloud services are changing most rapidly and many companies began work process innovations by employing these services. Instead of storing documents in PCs and sending them via email or sharing them using USB, employees can store all work-related software and documents in the central server and retrieve/download them whenever necessary. Documents no longer have to be printed out as they can be accessed via and read on tablet PCs.
In a number of companies, employees can not only handle work tasks such as production management, process management, materials management and in-house ERP within the office, but also in factories and outside the office by using mobile cloud.
In short, enterprises can enjoy increased productivity by concentrating on their core business as they can simply borrow and use needed amount of resources instead of having to purchase IT equipments and investing time and labor for their operation.
Other than your company’s, what do you see as the most impressive cloud solution or product or deployment found in the market in 2011?
Han: Apple’s iCloud. iCloud is a service that allows users to share various contents including music, photos, applications, e-books and documents which are strong competitiveness of Apple among multiple Apple devices.
We think iCloud is very impressive in that it further develops its existing business models of selling Apple devices and applications by connecting all Apple devices of a user and allowing the user to share all the contents. It is a very customer-centric idea that values the customer experience of Apple users.
What were your three most important lessons learned about cloud computing in 2011?
Han: 1. To experience actual benefits, a ‘select and concentrate’ approach is required when adopting a cloud-based technology. Otherwise, the input costs could outweigh the savings from using the technology due to excessive license cost and initial cost for building the infrastructure.
2. To provide an external hosting service, not only a quality solution but also a dedicated organization must be formed and operated to satisfy diverse needs of SMB customers. Also, active marketing activities are required as well as a strong security policy that can eliminate users' concerns about information security.
3. Since cloud is an enabler of innovation throughout the IT industry, it is very difficult for a single company to internally develop and accumulate the technology. This is why there should be more open sources in use and various technical exchanges, through connection with the government, industrial and academic sectors as well as through active cooperation with other companies.
Where will cloud computing head towards in 2012?
Han: 1. Accelerated adoption of Mobile Office using cloud technology: Expected to witness a speedy adoption of Mobile Office/Moving Office that enables one to perform work tasks anywhere, anytime via mobile, tablet PC, PC in public places, etc. All documents can be placed on the cloud to be shared/revised/stored at home or during meetings. Also its collaboration feature will allow multiple users to work together.
2. Increased users of server hosting service: expected to see a rise in the number of SMBs that use server hosting service that results in cost savings and speedy market trials.
3. Entrance into the early stages of the large volume data processing market: Expected to enter the big data analysis market that supports rapid decision-making by using large volume of atypical data.