”Until four years ago, foreign companies were the leaders in the market. But now, Korean companies are catching up and securing contracts, surpassing foreign companies.”
After COVID-19, remote work has spread throughout the industry, increasing the demand for virtual desktop infrastructure (VDI) solutions. In the early 2020s, foreign corporations dominated the market, but now domestic companies, which focus on cost-effective solutions and stringent government security regulations, are emerging.
◇ Storing data in a virtual server space… working anytime, anywhere
The term VDI may be unfamiliar, but it is closely related to our daily lives. VDI is a system that allows access to internal data from outside the company, enabling work anytime and anywhere. By implementing VDI solutions within corporate infrastructure, a virtual space is created on internal servers. Necessary work data is stored in this space, and software is installed to connect personal devices such as laptops and smartphones. Through this software, users can enter specific values to access the virtual space and work outside the company.
A similar solution is Desktop as a Service (DaaS). DaaS differs from VDI in that a cloud provider offers the virtual space. VDI operates its own infrastructure by the corporation itself, while DaaS sees the cloud service provider manage the infrastructure and provide the service. VDI companies and cloud providers sometimes collaborate to secure DaaS projects.
◇ “The era of foreign products is over… domestic security regulation tailored Korean companies are rising”
During the period when remote work was spreading due to COVID-19, foreign VDI companies like Citrix and VMware were market leaders. Omnissa, a VDI company spun off from VMware last December, hosted an event this month to introduce a new partner program aimed at new customers in Korea. The Korean market ranked 12th in Omnissa’s global sales.
However, industry insiders say that the era of foreign dominance in the VDI market is over. Most domestic corporations create products using open-source software, unlike foreign companies that produce solutions with their own technology. Business-to-business (B2B) corporations require ‘custom solutions’ based on their clients. According to the industry, if custom solutions are outsourced to foreign companies, costs can be two to three times higher, and the production period is longer. It has been noted that receiving feedback when repairs are urgently needed takes a lot of time.
Prominent domestic companies that produce VDI solutions include SK Broadband, Tilon, Gabia, and Somansa. As demand for VDI increases, particularly in the financial sector and public institutions, domestic companies are also seeing a rise in workload. SK Broadband recently secured a contract for the Smart Work Project for SBI Savings Bank and signed a supply agreement for its solution, ‘Cloud X.’ Both Citrix and VMware participated in the bidding, but it is reported that SK Broadband won the final contract. In February, it secured a DaaS construction project targeting more than 33,000 employees of the Korea Post in collaboration with Naver Cloud.
Tilon has built its products for various networks such as the Bank of Korea, Jeju Tourism Organization, Korean Red Cross Society, Korea Transportation Safety Authority, Paju Youth Foundation, and Korea Post, in collaboration with KT Cloud. Tilon’s revenue increased by 69%, from 4.525 billion won in 2023 to 7.664 billion won last year. Gabia’s revenue also rose from 261.5 billion won in 2023 to 282.4 billion won last year.
Globally, the VDI market is expected to continue its growth. According to the global market research firm Nestor, the VDI market size is expected to grow from $9 billion (13.419 trillion won) in 2022 to $19 billion (approximately 26.4 trillion won) by 2035.
An industry insider noted, ‘As domestic companies specialize in the certification systems required by the government and national security system guidelines, foreign companies will gradually lose their foothold.’