What You Should Know About Amazon's New Data Centers in South Korea

Business.com / Technology / Last Modified: February 22, 2017

Amazon's latest expansion represents its growing international influence and another power move in the ongoing cloud wars.

Amazon is expanding even farther into Asia.

In an official announcement in November, Amazon said that the company will be building a new cluster of data centers in South Korea, the most recent move to push into new territories and regions.

The data centers will power Amazon Web Services (AWS), the cloud computing service that Amazon provides, allowing companies to rent infrastructure, computing power, and storage space.

While Amazon may be known most for its popular e-commerce business, AWS is quickly catching on among enterprises the world over. In fact, Amazon is the largest public cloud provider in the world, with major companies such as Netflix, Pinterest, Adobe, Expedia, and Reddit using the service to help run their businesses. The move into South Korea is just a snapshot of Amazon’s overall business strategy as it seeks to generate more influence in an economically growing area of the world.

Related Article: Cloud Wars: How Amazon Went from Bookseller to a Major Technology Provider

Amazon stands to gain a lot from this move. For one thing, by placing data centers in South Korea, the company can gain access to new clients while strengthening relationships with existing ones. The announcement is in part a response to Samsung and some gaming companies wanting Amazon to establish data centers in their home region.

Amazon was obviously only too happy to do so. And the Korean market is ripe with rapidly growing companies that will want to use Amazon’s cloud services. Some of those companies include startups like Beatpacking and Devsisters, enterprises like SK Planet and SM Entertainment, and video game makers like Gamevil and Nexon. With more clients ready to partner with AWS, Amazon can gain a firm hold as the top public cloud provider.

The South Korea expansion will be the fifth AWS region that Amazon has opened in Asia, as well as its twelfth data region overall. This means Amazon is growing its international influence, a savvy decision considering that according to some countries’ laws, some customer data can’t leave its country of origin.

Moving into South Korea means Amazon can conduct business with companies it couldn’t before. Amazon also says the move will allow customers to receive low-latency access to websites, games, SaaS applications, and mobile applications, helping these clients be more versatile and successful in the future. Being one of the first to offer such opportunities will only increase the value of Amazon’s service.

Ongoing Cloud Wars

But the true impact of this announcement is the overall effect it will have on the cloud wars. Right now, Amazon is leading the competition for cloud services, with Microsoft and Google running behind. Though Amazon is the clear leader at the moment, the competition is intense, with price cuts and new service offerings happening on a regular basis.

Already, markets in North America and Europe are heavily saturated with cloud services, but Asia provides many more opportunities for growth. Certain regions in Asia -- like South Korea, Japan, China, and India -- are poised for aggressive economic expansion, making them a perfect target for cloud adoption. The result has seen the cloud wars work its way into Asia.

For example, Microsoft recently launched three cloud data centers in India, while IBM entered into a deal with a Chinese data center provider so it could launch its own service to Chinese customers. All of this doesn’t even take into account other international cloud providers, such as China’s own Alibaba, which has an aggressive strategy of its own for securing more clients and contracts around the world.

This is really only the beginning for Amazon’s growth in Asia. The company already has plans to build more data centers in China and India, so the competition will only get hotter as time goes on.

Related Article: Study Shows Small Businesses Are Doubling Profits by Switching to Cloud Computing

With more companies looking to use software defined storage and virtualization to improve their organizations and operations, it only makes sense why there would be so much demand for cloud services. Amazon's expansion will serve both local companies looking to take advantage of the scalability of cloud computing while making data storage easier for international conglomerates with sensitive data that is required to be stored in local servers. The expansion of the cloud wars will only continue to serve cloud customers, who will benefit from competitive pricing in an increasingly saturated market.

Image via Flickr

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