Mining giant Rio Tinto and accounting software vendor Xero are among 2,500 Australian and kiwi companies that have signed up to cloud computing services from US-based Rackspace.com.
Rackspace.com offers three cloud computing services - Cloud Files, a pay-as-you-go, cloud storage product similar to Amazon's S3; Cloud Server, a pay-as-you-go compute on demand service similar to Amazon's EC2, and Cloud Sites, a 'platform as a service' offering similar to Google's App Engine.
Rackspace.com boasts nine data centres globally (including five in the United States and three in Great Britain). The company set up an Asia-Pacific office 12 months ago, headed up by APAC managing director Jim Fagan.
Rackspace has since built its first Asia-Pacific data centre in Hong Kong and signed up a swathe of new customers including WA Business News and DinosaurDeals.com.au.
But Fagan said he is not interested in building a data centre in Australia.
"Not at this point, no," Fagan told iTnews. "We'll consider it as we see market demand for it."
The company is instead making investments in sales and support staff to win Australian customers over to the scale and attractive pricing available from hosting offshore.
Fagan said Rackspace has for many years considered Australia and New Zealand to be "strategic markets", but only brought on its first Australian staff member, sales manager Mark Randall, at the end of February.
"From a support structure, we needed to get somebody on the ground to take care of the customers we have and help them understand the product," he said.
This week the company hired a second Australian sales and support employee, Paul Tuffs, and two more are expected to join the local operation in the first half of 2010.
The bandwidth cost versus latency conundrum
Randall told iTnews that many Australian companies are interested in hosting their sites or accessing their services from data centres located overseas to avoid the high cost of bandwidth in Australia.
But those benefits have to be weighed up against the potential for network latency when accessing a US or Asia-based service from Australia.
He claimed that Rackspace.com has addressed the latency issue via an agreement with content delivery network Limelight Networks, which maintains a point of presence in Sydney.
"From within the control panel of Rackspace.com's Cloud Files product, a customer can switch any given file from private to public - which automatically starts delivering content to the Limelight Content Delivery Network at a cost of US$0.22 per gigabyte," he said.
"Compare the 22c per gigabyte you pay for traffic delivered locally using Cloud Files, to the price of local hosting, where people pay up to 20c per megabyte," Randall said.
Randall said that typically, Australian customers see response times of 160 milliseconds when connecting to Hong Kong from Australia's eastern capitals, or 230 milliseconds when connecting to Rackspace's main data centre in Texas, United States.
Randall said local companies are using Rackspace.com to dip their toes in cloud computing because it offers a "hybrid" model between dedicated hosting and cloud computing.
With a background as a successful dedicated hosting business, the company's calling card is that "the cloud is for everyone, but not everything."
"We can mix and match. Let's say a customer had a site with consistent usage, but then they had a ticketing application that gets hammered once a month," he said. "We look at the hosting infrastructure and say, this part is prone to bursts and can be deployed in the cloud, this part needs customisation so should remain on a dedicated server."