The total addressable server market size in South Korea, in terms of business spending opportunities, is poised to grow at a compound annual growth rate (CAGR) of 5% between 2020 and 2025, driven by accelerating digital transformation initiatives among businesses in the country, and the subsequent increase in their demand for high computing power, says GlobalData, a leading data and analytics company.
GlobalData Market Opportunity Forecast to 2025: ICT in the South Korea reveals that the increasing adoption of disruptive technologies such as artificial intelligence, IoT and big data as part of their digital transformation efforts to improve operational efficiency, improve services and gain competitive advantage, encourages also companies to upgrade their technological infrastructure, including servers to support such workloads.
Saurabh Daga, Technology Analyst at GlobalData, comments: “Several companies in the country are accelerating their remote work, online services, cloud computing and e-commerce strategies to emerge stronger from the disruption inflicted by COVID-19 and therefore improve their calculation and storage. infrastructure to support these implementations. This will help South Korea’s corporate server spending grow from US $ 1 billion in 2020 to US $ 1.3 billion in 2025.
KT Corp, for example, launched a new internet data center in southwest Seoul in May 2021. LG Uplus Corp. is investing KRW 318.1 billion ($ 267.63 million) to build a new Internet data center by the end of 2023. In July 2021, Digital Reality, a global provider of interconnection solutions and data centers cloud data and carrier neutral, announced that it will build its second data center (64 MW) in South Korea, scheduled for delivery in the first quarter of 2023. The company is already engaged in the construction of its first data center, which should be online in Q4-2021.
Among all server hardware segments, low-end servers will account for the largest share of total revenue opportunities during the forecast period 2020-2025 due to their low cost performance advantages. Business spending on midrange servers, on the other hand, is expected to grow at the fastest CAGR of 8.1% over the forecast period.
Mr. Daga concludes, “While the large enterprise (1,001 to 4,999 employees) and very large enterprise (5,000+ employees) segments will jointly account for the largest share of total server spending in South Korea over the course of this year. Over the forecast period, the combined spending of micro-enterprises (1-50 employees), small (51-250 employees) and medium-sized enterprises (251-1000 employees) will increase at a slightly faster CAGR of 5.1% during the forecast period.
“The Ministry of ICT’s technology support to small and medium-sized enterprises (SMEs) and the Ministry of SMEs and startups investment of KRW 1.5 trillion (US $ 1.4 billion) in startups will particularly boost growth of this segment.