Fry bacon in a Dutch oven until crisp; remove bacon, reserving 2 tablespoons drippings. Crumble bacon and set aside.

Sauté onion in reserved drippings until tender; add potatoes and water. Cover and simmer until potatoes are tender, 15 to 20 minutes.

Stir in milk, corn, salt, and pepper to taste; continue to cook, stirring frequently, until heated through. Sprinkle with crumbled bacon to serve.