Two telecom companies from Japan and South Korea are starting a US65m cloud computing venture that will see them open an Internet data center, to be jointly run, in Gimhae City, near Busan.

Busan is conveniently located close to Japan. The data center, run by South Koreas KT Corp, one of its largest telcos and Japan's SoftBank Telecom Corp will be used mostly for data storage.

KT Corp said it will start offering its cloud services to Japanese customers in September.

Demand for cloud computing services has been growing in Japan since the devastating earthquake and tsunami that struck in the north earlier this year.

Sources at Nomura Research Institute said a number of companies and government departments lost server rooms, and are now looking at additional redundancy and cloud offerings to reduce risk in future.

The rolling power cuts planned by the government (see our earlier story here) are also leading to increased demand for cloud services, with many companies saying they will struggle to run their own data centers.

KT told new agency Reuters that companies in Japan that require their own data center operations are looking to Korea, where energy use does not pose as many challenges, to build new facilities.

SoftBank, which will have a 49% stake in the project (KT has a controlling 51%), will use its position to secure a stable data network. 

KT  - South Korea's second largest telecoms group - recently announced plans to transform itself into an IT convergence group with a strong focus on cloud-based IT services.

It said it will soon start providing Software-as-a-Service for its mobile customers and work with global partners such as SoftBank to widen its cloud reach.

SoftBank, aware of the rising energy challenges in Japan, said on 25 May it will work with Japanese authorities on new renewable energy goals, launching a Natural Energy Council in July that will promote renewable generation.

SoftBank's CEO and President Masayoshi Son is Japan's richest man and he wants to build solar energy facilities at a cost of about US$97m in Eastern Japan to help the country recover from the loss power seen from the fallout of the Fukushima Daiichi nuclear plant.