Microsoft has begun migrating Australian Office 365 customers to its data centres in Sydney and Melbourne, nine months after first announcing onshore hosting.
Office 365 tenants currently hosted in Singapore – previously the closest Office 365 location – will have Exchange Online and SharePoint Online services moved to Microsoft's Australian points of presence.
Customers will be given two weeks' notice before cutover. Skype for Business instances will be migrated separately, typically during a different month.
The Australian data centres will host SharePoint Online, Exchange Online, OneDrive for Business, Project Online, and Exchange Online Protection. Yammer will continue to be hosted offshore.
According to a Microsoft blog post, new Office 365 and Skype for Business users in Australia, New Zealand and Fiji will be automatically provisioned in the Australian data centres. Australian customers will now have GST added to their invoices.
Backups will no longer be stored offshore - "data will be replicated across data centres in Australia," according to an FAQ.
Steven Miller, director of Microsoft Australia's applications and services group said customers and their data would be transferred locally on a workload-by-workload basis.
"Data transfer and validation occurs in advance with no impact to users and once that is completed the actual cut-over phase is very fast. There is no interruption to service for customers."
The migration is slightly behind schedule, having originally been planned for July, but Miller said the move was "a phased migration and tenant migrations are in line with our expectations".
The shifts begin this month. Microsoft declined to provide a completion date.
The announcement is likely to be welcomed by customers with concerns about data sovereignty or latency.
Microsoft first announced local data centres for Azure in December 2014.