KT, né Korea Telecom, has launched a public cloud that beats Amazon Web Service on price and performance.  Additional performance testing also shows that the new service, called ucloud Compute Service (ucloud CS) also beat Rackspace, GoGrid, and Terremark on a number of benchmark tests including CPU, disk, programming language, memory I/O, and encoding performance.  KT built ucloud CS with the help of Cloudscaling, a California-based outfit that specializes in building really big clouds using commodity hardware and open source software.

KT is Korea's largest provider of wired telephone and high speed Internet service, the second largest wireless carrier in the country, and it aims to be a major player in business and consumer cloud computing as well.  In service of the latter goal, ucloud CS follows other aggressive endeavors that include a cloud-based PC offering and partnering with Citrix for desktop virtualization and Microsoft for Office 365.

Jung-sik Suh, senior vice president of the Cloud Services Business Unit at KT explains,

"KT will be equipped with cloud service lineup for personal and corporate uses. Through U Cloud Home function upgrading, we will continuously develop personal contents hub as an essential service platform for personal data. For corporate cloud services, KT will promote joint entry into foreign markets by leading the cloud market in Korea through the active securing of both in-house technology prowess and alliances with outstanding solution companies."

KT isn't just making chin music, either.  To motivate adoption and inspire trust for its new cloud, they will be offering one of the most aggressive SLAs you are likely to see anywhere.   When monthly-accumulated failure time exceeds 43 minutes, KT plans to compensate users for downtime at 100 times their standard usage fee.  Given that Korea's hosting companies' monthly average downtime is a staggering 24 hours and the compensation ratio is a mere 3 times the use fee, KT's SLA is revolutionary.

Telecom companies are in a unique position to deliver high quality cloud services at great economies of scale, as shown in recent moves by carriers in India, Singapore, and elsewhere, giving them the potential to provide serious competition for the likes of Amazon, Rackspace, and other public cloud providers.  KT's Mr. Jung explains it like this:

"We have several major strategic advantages that the major public clouds do not. These include network assets, bandwidth, geographic dominance and expertise in billing and services delivery. Combining a commodity cloud approach with our unique assets, we can offer a cloud computing service that is highly competitive with industry leaders like AWS EC2."

KT's price advantage over AWS is not trivial.  The most common AWS configuration is an m1.small instance, priced at $61.20 US per month.  The equivalent ucloud CS configuration is a 1 virtual core / 2 GB RAM instance, priced at $49.94. This represents a savings of approximately 18 percent.  Additionally, ucloud CS configurations include 100 GB of free bandwidth, valued at approximately $10.

Perhaps more nuanced, but certainly no less impressive are the results of the ucloud CS benchmark against Amazon, Rackspace and other cloud solutions, commissioned by Cloudscaling and performed by CloudHarmony, a cloud benchmarking specialist.  With the exception of cloud dark horse BlueLock on five tests and GoGrid on two, ucloud CS handily beat everyone else on all the tests.  The most dramatic results included beating Rackspace by three to one on large server CPU performance and Amazon EC2 by more than three to one on small server disk I/O.