The Korea Herald


After server shutdown, Kakao pledges to triple investment over next 5 years

IT behemoth keeps mum on compensation plan for individual victims

By Kan Hyeong-woo

Published : Dec. 7, 2022 - 15:46

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Kakao’s former and current officials speak about the cause of the Kakao service outage and future preventive measures during the online conference on Wednesday. (Kakao) Kakao’s former and current officials speak about the cause of the Kakao service outage and future preventive measures during the online conference on Wednesday. (Kakao)

South Korean IT giant Kakao vowed Wednesday to triple its investment in efforts to set up more stable service operations after the company faced heat when its major services, such as KakaoTalk, were shut down due to a data center fire.

“Kakao will invest more than three times the amount it invested in the past five years to secure human resources and develop technologies for service stabilization while implementing disaster recovery with a triple structure or higher over the next five years,” said Ko Woo-chan, a subcommittee co-chair under Kakao’s emergency countermeasure committee, in an online conference.

Kakao did not disclose the amount of investment it had used for service stabilization in the past five years. A Kakao official told The Korea Herald that the future investment will include various spending areas including expanding infrastructures such as more servers and upgrading information security.

The conference, named "if(kakao)dev 2022," is the IT company’s annual developers’ event. But this year’s edition has been dedicated to looking back at what went wrong during the service blackout in October and what the company could do better in the future to prevent such a mishap.

Kakao’s first data center in Ansan, Gyeonggi Province, began construction in January. With a total of 460 billion won ($350 million) allocated for the project, the data center is expected to begin operation in 2024. Kakao said it is strengthening the data center’s infrastructures on electricity, cooling and communication system so that it can stay operational under all circumstances.

Ko added that Kakao’s envisioned disaster recovery architecture, which is expected to have three or more data centers, can serve as a backup even if one of the three data centers becomes paralyzed.

According to Kakao, the company plans to set up a new committee on disaster recovery in preparation for large-scale service errors.

Ko pointed out that the company will work with outside experts and partners to diagnose the vulnerability of Kakao’s business continuity plan -- an action plan designed to minimize the stoppage of business despite natural disasters or unforeseen incidents.

Namkoong Whon, former co-CEO of Kakao, said the incident made the company realize what was at the core of its environment, social and governance efforts.

“Kakao’s top ESG priority was providing our services stably. Our (server) duplication measures were like an incomplete bridge. We will do our utmost to ensure such an incident never takes place in the future,” he said. Namkoong has been part of Kakao’s emergency countermeasure committee after he stepped down from the top position shortly after the service blackout.

Kakao still did not unveil a possible compensation plan for those who claimed to have suffered from the IT company’s service meltdown.

According to the Ministry of Science and ICT, there have been about 100,000 damage reports over Kakao’s service outage. Of them, 15.1 percent said they used Kakao’s free services such as KakaoTalk, the popular messaging app used by over 90 percent of the population, and took a financial hit.

Kakao’s consultative body, which was established to discuss damage compensation, carried out two meetings but has not come up with a blueprint for a compensation plan. The members of the consultative body include Kakao officials and representatives of small merchants and a consumer association.