AWS announces Korea as its sixth Asian region. Boosts the accelerating cloud maturity of Asia

Amazon Web Services (AWS) recently announced Korea as the sixth geographic region announced in Asia for the IaaS juggernaut. Korea joins established locations in Australia, China, Japan and Singapore as well as recent announcements of a forthcoming region in India, and a second Chinese region. Which new location will come online first is unknown at this point.
Clearly the focus of the investment in Korea is to take advantage of the local demand from an increasingly cloud hungry Korean market, but to also leverage the massive demand for gaming based applications that have long been a staple of the Korean technology sector.

More broadly than Korea, the fact is now that AWS has more announced locations in Asia than any other location. This fact is an exceptional one for the region and reflects several factors.

  • Demand for cloud across models, eg IaaS, SaaS, PaaS et al is real and growing in Asian markets.
  • This demand varies by the type of organisations and geography. In mature markets, the growth for cloud is across legacy firms, and startups.
  • Public sector in mature Asia markets such as Australia, Singapore and Japan is increasingly implementing cloud based solutions. The spectre of privacy has largely been overcome by the performance of vendors such as AWS and Microsoft in the market.
  • In emerging or less mature Asia markets such as Indonesia, Thailand etc, the growth in cloud is particularly strong in the start up and greenfield organization markets. More traditional companies, and governments have been slower to uptake cloud. As the impact of the local startup sector starts to increase, it is anticipated that the organisations will follow the shift towards cloud made by so many of their peers.
  • Geographic location issues are receding. The increased investment in Asian cloud locations by the likes of AWS are removing geographic location as an issue for an increasingly significant proportion of the Asian economy. Regulatory authorities are slowly becoming more flexible and aware of the need to work with cloud providers to ensure that they can balance requirements with the functionality of the cloud.

Korea is a unique market, and will provide AWS with a number of new challenges. It is perhaps the most individual market in Asia. The role of the Korean Chaebols, such as Samsung have a fundamental impact on the market. Yes, it is a significant opportunity, but it is a very difficult market to crack because of the unique local characteristics.

Back to AWS, the next steps for it are going to be interesting to watch. By the end of next year it will have live capabilities in the six most important and largest cloud markets in the region. The AWS model is of course one that values depth of location rather than breadth, so the investment in Asia is even more remarkable, as it clearly will not have the depth in some Asian markets that it enjoys in the U.S based facilities.

Indonesia, Malaysia, Thailand and New Zealand are examples of markets that now come into play for a region, not just an edge location. Most of these markets are far from ready for AWS to arrive from a regulatory (e.g Indonesia) or demand (New Zealand) perspective. They do offer long term options, and it would not surprise to see AWS look to offer smaller scaled facilities, (with clear compromises needed on cost, functionality and scope) for clients to ensure that it is able to offer local coverage to as broad a number of economic markets as possible.

Finally on AWS, the recent re:Invent customer event showed that the revenue growth has not abated, (80% CAGR is extraordinary), the functionality (over 500 new offerings in 2015) has not abated and with Hewlett Packard shuttering it’s public cloud offering, the AWS impact on the competition and clients is also not showing any respite.

About capioIT - Phil Hassey

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world. +61422231793
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