[THE INVESTOR] Samsung Electronics is expected to get a big boost with its recent acquisition of US-based cloud service start-up Joyent but it would be still not enough to compete head-on with the market No. 1 Amazon Web Service, or AWS.

Samsung did not reveal the acquisition price for the deal that was announced on June 16. Global Innovation Center, its Silicon Valley start-up accelerator, is said to have led the whole process.

After the acquisition, Joyent will be run as a separate entity under Samsung Electronics America. There will be no change in its name and top management, sources said. 


“With the Joyent acquisition, Samsung can strengthen its cloud services for Samsung Pay, S-Health and Knox especially in the US and Europe,” said Lee Seung-woo, an analyst of IBK Investment and Securities in a report.

Considering Joyent currently operates data centers in the US and Netherlands, Samsung can strengthen its data management capability amid the wider adoption of the Internet of Things technology and increased attention to data ownership.

“In the long term, Samsung may be able to reduce the cloud hosting fees of Amazon,” Lee said. “But it is nonsense that the Korean tech giant can compete head-on with AWS any time soon.”

By Lee Ji-yoon (jylee@heraldcorp.com)