Cloud provider Rackspace will begin operating its first Australian servers within the next four months, after inking a 10-year lease with data centre builder Digital Realty.
The US company has had a sales office in Australia since March 2009 and eight data centres across the US, Britain and Hong Kong.
Managing director Jim Fagan said today that it had decided to establish its ninth data centre in Sydney, to address customer demand for onshore hosting.
"In the past couple of years, one of the major requests from Australian customers was the ability to actually host them from a data centre on shore, in Australia," he said.
"We will be opening our ninth global data centre, and our first facility here in Sydney; this will represent tens of million dollars of investment and a long-term investment over the next 20 years."
As the anchor tenant of Digital Realty's $250 million facility in Erskine Park, Western Sydney, Rackspace will occupy one of four 1.4MW data halls, initially consuming 480KW at a PUE of 1.3.
Digital Realty also operates Rackspace's US data centres in Virginia and Dallas, Texas.
Rackspace planned to begin installing cabinets, power and cabling in Erskine Park in October, with its first customer due to go live in the facility by the end of the year.
The company's Australia and New Zealand country manager Mark Randall said it would begin selling Sydney-based capacity today, initially targeting existing Australian and multinational customers.
Rackspace planned to offer its enterprise managed virtualisation product from Sydney initially, before introducing its whole suite of products and services including the open source OpenStack platform.
Randall said its Australian pricing would be "almost identical" to its global offerings, with the exception of bandwidth, which was "many magnitudes more expensive here than anywhere else in the world".
Rackspace planned to hire 50 staff to support its Erskine Park operations, which would attract payroll tax benefits under the State Government's 2011 jobs action plan.
NSW Deputy Premier Andrew Stoner was not aware of any NSW agencies that planned to take up Rackspace offerings, but said the State Government was open to doing business with the cloud provider under its ICT Strategy, released in May.
Rackspace offers storage-, server- and platform-as-a-service to some 2500 companies in Australia and New Zealand, including Rio Tinto, Xero, Lonely Planet and Tourism Queensland.
Patriot Act concerns?
Despite the higher bandwidth costs in Australia, Randall forecast high demand for the Sydney facility, especially from government and financial services organisations required to keep certain data onshore.
Randall and Fagan asserted that all Australian hosted customer data would not be handed over to any overseas governments, unless required to by Australian law.
"Data hosted by Rackspace in Australia is subject to the same laws as cloud services offered by wholly owned Australian companies," Randall said.
"Our general counsel has publicly come on the record saying we won't hand over any customer data unless we are under instructions by Australian law."
"I think [the Patriot Act] is up for interpretation; I don't think it's been fully established," Fagan explained. "We are going to comply with local regulations in jurisdictions we operate in.
"If the US Government ends up making a request through those jurisdictions and it is granted by that jurisdiction then we will comply with that."