“We know it will take a lot of effort to restore lost confidence.” It is in his words that the co-CEO of Kakao reacted in a press release after the giant failure of the group’s applications. Namkoong Whon has since resigned and handed over to the other co-CEO.
A transcendental decision that is explained by the magnitude of the sudden cessation of activities of the Korean company after the fire of a datacer. Indeed, Kakao has most of the services of the daily life of the inhabitants of South Korea. The breakup also raises the question of the group’s supremacy in the country.
A quasi-monopolistic company
The Kakao group now owns all the apps that rule the lives of Koreans. First with KakaoTalk, instant messaging. Then with KakaoStory, an image and video sharing service (like Instagram); KakaoMusic, the Korean Spotify or KakaoPage, a mix of Netflix and Wattpad that brings together various cultural content.
And Kakao’s dominance doesn’t end there. It also affects the transport and economic sectors. The online banking service, mobile payment and management of means of transport (bus, subway, taxi) are provided entirely through Kakao services. A monopoly reminiscent of WeChat in China with its one billion users and dozens of similar applications.
Evidence of its near monopoly position, the company’s apps are used by 47 million people, out of a total population of 52 million. And this 90% of Koreans who use the services felt very upset during the few hours that the blackout lasted.
The cause of the fire remains to be determined.
The investigation is still ongoing to determine the cause of the fire. The fire broke out on October 15 at the SK C&C data center in Pangyo, south of Seoul. Thousands of Kakao servers went down. Although the fire was quickly brought under control, it took longer for access to the various applications to be restored.
In their apology message, the two Kakao bosses also announced that they would be available to investigators to understand the causes of the fire. Hong Eun-taek, the now sole CEO of Kakao, also said that users of the platform will be compensated: “We will establish a compensation policy for all stakeholders, including users and partners, who have been affected by this incident. We will implement this compensation as soon as possible.”
Kakao, mastodon who wants to continue being one
The South Korean group, which has 15,000 employees, has shown its limits with this incident. A paralysis of the lives of tens of millions of people, in all sectors of activity, which worries the government. “If a network problem occurs, it can cripple people’s daily lives and be fatal to national security,” Prime Minister Han Duck-soo told a ministerial meeting.
To prevent further dysfunction, the company with a turnover of €4 billion (2021) announced that it had invested €326 million to complete the construction of its own data center in Ansan. This new center should be operational next year. Kakao also said that it is preparing to build a second center in Siheung, which should start in 2024.
Source: BFM TV
