Samsung SDS Rises to No. 2 in Korea's Cloud Industry... Market Growth Accelerates Amid AI Boom

According to a recent survey, Samsung SDS has overtaken Microsoft (MS) to claim the second-largest market share in the domestic public (open) cloud industry. Analysts attribute this achievement to Samsung SDS's business structure, which goes beyond infrastructure to encompass software (SW) and generative AI platforms, amid the ongoing artificial intelligence (AI) boom.

According to the "2024 Domestic Public Cloud Service (CSP) Market Share" report released on April 13 by market research firm IDC, Samsung SDS recorded a revenue market share of 11.3%. Its estimated cloud revenue during this period was 703 billion won. Notably, Samsung SDS's year-on-year revenue growth rate reached 29.4%. The company has maintained the second position in the domestic public cloud market for two consecutive years since 2023.

In 2024, the company with the highest revenue in the domestic public cloud industry was Amazon Web Services (AWS), which secured a 22% market share (1.372 trillion won). AWS also maintains the highest market share among cloud service providers (CSPs) in the global market. Microsoft (MS) followed with 9.6% (601 billion won), then Naver with 5% (311 billion won), and KT with 2.0% (126 billion won).

The strong growth of Samsung SDS can be attributed to its diversified business structure. Its cloud services represented by the "Samsung Cloud Platform (SCP)," generative AI platform "FabriX," and generative AI-based collaboration solution "Brity Works" all performed well, contributing to its high market share and growth. IDC's report aggregates revenues from Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), which enabled Samsung SDS to achieve a high market share.

During this period, AWS established a near-monopoly in the traditional cloud segment of IaaS, providing infrastructure, with a 52.6% market share. Samsung SDS (15.3%), Naver (7.8%), KT (6.0%), and MS (4.9%) followed. In PaaS, AWS (19.2%) and MS (13.9%) were in competition, while in SaaS, Samsung SDS (12.3%) and MS (11.3%) were closely matched.

The growth trend of the cloud market is noteworthy. In addition to increased demand for cloud services driven by AI, CSPs are launching AI-tailored services, resulting in annual revenue growth. In 2024, all major companies in Korea, including MS (28.6%), AWS (24.9%), Naver (18.3%), and KT (15.4%), recorded double-digit revenue growth rates. IDC projects the domestic public cloud market's compound annual growth rate (CAGR) to be 18.9% through 2029.

The growth trend is also evident in the global market. According to global market research firm Synergy Research Group, the global cloud market revenue in the third quarter of last year reached 106.9 billion USD (approximately 159 trillion won). In the global market, revenues from public IaaS and PaaS accounted for the majority, with the sector growing by 30% in just the third quarter of last year.

In the third quarter of last year, the three major global CSPs—AWS, MS, and Google Cloud—accounted for 63% of the global market. More specifically, AWS held 29%, while MS and Google accounted for 20% and 13%, respectively. While AWS's share declined slightly, MS and Google Cloud have been gradually increasing their market shares. John Dinsdale, Chief Analyst at Synergy Research Group, commented, "As MS and Google narrow the gap, Amazon's share is gradually declining, but AWS still maintains its leadership effectively. The gap between leading cloud companies and the rest of the market continues to widen."

This content was produced with the assistance of AI translation services.