With the Corona Pandemic, organizations around the world are accelerating digital transformation, and their central axis is on cloud transformation. With the announcement of the’Digital New Deal’ and’Digital Government Innovation Development Plan’ last year, the government is also expected to see the cloud as the core infrastructure of the 4th industrial revolution and initiate a’national cloud transformation’ in earnest. To this end, the current public sector cloud transition, cloud procurement system innovation, private cloud adoption environment improvement, and flagship projects are being actively promoted.
In particular, the strategy of “100% transfer to public information system, private and public cloud by 2025” is the foundation for revitalizing the public cloud market. According to the Korea Intelligent Information Society Agency (NIA), the public sector cloud project budget in 2021 was totaled at 8214 billion won, which is about 11% of the total informatization budget of 7.521.1 billion won. The government’s cloud (G-cloud) business is 584 billion won, accounting for the largest proportion (62.3%).
Starting this year, 1960 governments, local governments, and public institutions have decided to completely convert the information system to the cloud. Institutions are pursuing a step-by-step transition to cloud starting with systems with expired useful lives and new system construction projects. Currently, a total of 224,000 information resources of the information system operated by national institutions are subject to conversion, of which 185,000 (83%) are subject to conversion. Infrastructure as a service (IaaS) and platform as a service (PaaS) by 2025 , It will be carried out in stages in all areas of service-type software (SaaS).
Acceleration of Cloud First Policies in Each Country
The’Cloud First Policy’, a government-led cloud adoption policy, has already been implemented in major developed countries including the US, UK, EU, and Australia for a long time. In the United States, in December 2010, cloud was actively introduced to public institutions through the’Cloud First Policy’. With the announcement of the’Cloud Smart Strategy’ in October 2018, the federal government promoted strengthening access to public services through modernization of information technology and maintaining cyber security.
The UK announced the’Cloud First Policy’ in May 2013 so that the government must prioritize the introduction of cloud when procuring new and existing services, and in 2014, it created a cloud service procurement ecosystem with the’Digital Marketplace Platform’. From April 2012 to October 2019, it has recorded 6.35 billion pounds (about 9.4 trillion won) purchases.
Australia started its’digital marketplace’ service in 2016, and it includes content that allows SMEs to more actively conduct business in the public sector by lowering the barriers to entry to public service.
Although it may be a bit late, the Korean government’s implementation of the’Cloud First Policy’ is expected to provide opportunities for sustainable growth to domestic IT companies along with innovation in public services.
Public cloud ecosystem should be an open opportunity for SMEs
According to the 2019 domestic cloud industry survey, out of 1142 domestic cloud companies, 59.7% of companies with less than 30 employees, 83.7% of companies with less than 100 employees, and the total number of software business operators registered with the Korea Software Industry Association (KOSA) Out of 34,640 SMEs, 98% of SMEs amounted to 34,010. Eventually, activation of the cloud industry must be achieved through the growth of SMEs.
In order to revitalize the public cloud, the government has prepared a’digital service professional contract system’ and’digital service distribution platform establishment’ in accordance with’cloud procurement system innovation’. It is expected to accelerate the adoption of private cloud into the public sector cloud and grow into a new cloud ecosystem where numerous SMEs can participate through SaaS-based services.
As of 2018, 3,505 companies were registered in the UK digital marketplace, of which 90% were SMEs, and 36% of the total contract size of about 2.644.9 billion, or 9618 billion won, was conducted with SMEs. In contrast, the domestic’digital service professional contract system’ implemented in October 2019 currently has 15 registered digital services, and the amount of digital service contracts contracted through’Seed’, the existing digital service market, is from 40.7 billion won in 2019. Through the digital service use support system, it is expected to increase threefold to 130 billion won by 2022. For the cloud industry to grow, it is necessary to establish a foothold for SMEs to contribute.
Fortunately, the’Digital Service Professional Contract System’ was implemented in October 2020, enabling SMEs in Korea to provide services to public institutions. With this system, SMEs that have supplied or developed software to public institutions through existing mid-sized and large companies, and IT companies that have developed and sold solutions to the private sector can also convert their competitive software into SaaS and directly supply and contract them. There is.
Didim 365, where I am working, is currently the only cloud MSP selected in the’Managed Category’ among cloud support services under the digital service contract system. In the case of’Dedim Now for Partner’ among our solutions, it is possible to easily convert the installed SW to SaaS type service. Jiran Jikyo Security’s OfficeHard Cloud, Mark Any’s Document SAFFER, and Samjung Data Service’s Mail Nara are implementing their own solutions as SaaS services to implement cloud business.
The public cloud ecosystem must become a solid center for the success of the’National Cloud Transformation’ to expand cloud adoption to the private sector based on the activation of the public sector cloud. In order to activate the’digital service professional contract system’, which is highly likely to develop into a cloud ecosystem, various efforts are required in addition to the rapid system preparation.
In order to become a foothold for more active participation and growth of SMEs, the government needs to continuously identify the difficulties of the SaaS conversion process of SMEs and prepare a system for cooperation between institutions and specialized companies that can provide direct and realistic assistance. In addition, the public cloud ecosystem should be expanded in various ways through active participation of numerous SMEs and service registration. Through the joint efforts of the government and SMEs, the digital marketplace ecosystem is expected to energize the entire domestic IT industry.
Minho Jang, CEO of Didim 365
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