The three major telecommunications companies in South Korea (SK Telecom, KT, LG Uplus) that announced their entry into the managed service provider (MSP) business are now securing relevant personnel. An MSP refers to an entity that manages and optimizes the infrastructure and services of cloud service providers (CSPs) such as Amazon Web Services (AWS), Google, and Microsoft (MS).
Major domestic MSPs Megazone Cloud, Bespin Global, and Metanet Tplatform are closely monitoring the entry of the three telecommunications companies into the MSP market. The entry of large corporations with strong financial power into the MSP business could intensify competition in the market and negatively impact the revenue of existing MSP operators.
According to the industry on the 14th, SK Telecom plans to conduct recruitment for a "cloud MSP service operations manager" until the 16th. The hired employee will settle the cloud usage of gaming companies using Tencent Cloud and respond to customer complaints. Additionally, the employee will manage accounts for customers using Microsoft Azure and compile information on the cost of service provision.
KT recruited employees responsible for public cloud operations until the 13th. KT specified that having "MSP business experience" was a preferred recruitment condition. The hired employee is expected to design the infrastructure for the public cloud and analyze customer requirements. LG Uplus is not currently conducting separate recruitment, but it noted that some of the dozens of employees handling the cloud sector will be mobilized for the MSP business. LG Uplus has announced its cooperation plan with AWS this month and intends to play the role of an MSP managing AWS's cloud services.
When the three telecommunications companies engage in the MSP business, they will be able to respond stably to cloud management demands within the group and achieve synergies with their existing businesses. Currently, all three telecommunications companies own their own data centers, and KT Cloud, a subsidiary of KT, is conducting CSP business.
Currently, Megazone Cloud, Bespin Global, and Metanet Tplatform, which have low profitability, are likely to feel threatened by the entry of large corporations into the MSP market. Megazone Cloud recorded an operating loss of 69 billion won in 2023, nearly doubling from the previous year's loss of 34.6 billion won. During the same period, Bespin Global recorded an operating loss of 15.7 billion won. Although Metanet Tplatform posted a profit, its operating profit was only 2.5 billion won.
Megazone Cloud, Bespin Global, and Metanet Tplatform are seeking investment through an initial public offering (IPO) to diversify their revenue sources. However, if competition increases and they fail to improve profitability, it may adversely affect the IPO process. According to market research firm IDC, Megazone Cloud ranked third in the domestic MSP market with a market share of 13.7% in 2023. Samsung SDS held the first position with 23.9%, while LG CNS ranked second with 23.6%.
Kang Myeong-soo, executive vice president of the Korea Cloud Association, noted, "Large corporate affiliates with financial strength and cloud infrastructure find it easy to bring existing customers into the MSP domain," adding that this is "the reason why the entry of the three telecommunications companies into the MSP business could pose a real threat to Megazone Cloud, Bespin Global, and Metanet Tplatform."