SK Telecom reviews: Public cloud yet to become cash cow
By Carol Ko 04-Jan-2012
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 (pictured), 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.
"We [SK Telecom] 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."
-- Han Nam-Seuk, CIO of SK Telecom
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.