Korean Cos. Struggling to Grab Larger Slice of Market
Korean Cos. Struggling to Grab Larger Slice of Market
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  • 승인 2004.07.01 12:01
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Network, Security, Server Makers Jump High,

Gov't Vows to Support Competitive Cos. after Scrutiny

Korea has poured enormous investment into the IT (information & technology) sector since 1998. The government designated the IT industry the number-one driving force for enhancing competitive advantages, and has made steady investments and support to the industry.

As a result, Korea is perceived as a leading IT superpower in the global market and has strengthened its IT infrastructure to the extent that many other countries benchmark Korea. The rapid expansion of Internet service used by individuals and businesses has speeded up infrastructure creation. A great number of domestic IT companies have actively developed new products with their own technology and trained IT experts, contributing to the domestic IT industry's development.

Numerous start-up companies were founded from 1999 and early 2000 in Seoul and other major cities in various IT fields such as Linux, package software, business-use software, server, storage, web-based solutions and games. The government granted unconditional support to businessmen who moved to start up IT companies.

Backed by the support, almost all the IT sectors, ranging from hardware such as network devices, servers and storage to Linux, security and web-based solutions have showed higher growth. However, IT start-ups with relatively weak technical sophistication started to go out of business from late 2000. Some of them went insolvent, hit by a slowing domestic economy, while others which failed to implement clear accounting and administration, ended up in bankruptcy.

As a result, the domestic IT industry is now at the mercy of foreign companies. Domestic concerns which were supposed to lead the industry yielded their positions to foreign counterparts. This being the situation, the government, under the leadership of President Roh Moo-hyun, has set the revival of the IT industry as a key policy task and is spearheading the project under slogans like "Creating a second IT start-up boom" and "Increasing investment in the IT industry to strengthen national competitiveness". Domestic IT companies are also rolling up their sleeves to lead industry development again while reflecting what they were doing in the past.

Such efforts have started to pay off.

Starting from the security device sector, the domestic IT industry has shown signs of recovery. This movement has expanded to network, server sectors and to the entire industry. Especially after the Internet mishaps seen last year, the Internet security device market has become resilient. Vaccine, IPS and network security-related companies have also seen robust business. With the fledgling IP telephony market, network device companies have been gradually awakening. Server and storage makers have tried harder to tackle the difficulty by supplying low-priced goods and those fit for the local business environment.

Judging that the framework for the revival of the sector has been established, domestic companies have set their mind on an aggressive market push starting this year, with the aim of reclaiming their leadership positions from foreign rivals and refreshing the national image as a real IT powerhouse.

The government, for its part, will refrain from indiscreet investment and aid practices, instead making efforts to find companies armed with real technological power and competitive edges in which to inject investments.

Lee Kum-ha, marketing team head of a server and storage maker, Uniwide Technologies Co., said that tough times of operations have passed and that business has gotten active from last year.

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