Why Data Sovereignty Is Still Making Australian Companies Panic

The most obvious technical argument for hosting cloud services in an Australian data centre is the improved latency. Yet when it comes to making that choice, concerns over data sovereignty and whether data will be accessed by US governments remain a key issue.

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This week, BMC launched a locally hosted version of its Remedy On Demand IT service management suite. The service runs from Macquarie Hosting’s Australian data centres. According to Stuart Mills, head of digital and SAAS hosting for Macquarie, concerns over where data resides are invariably one of the first issues raised when local businesses look at cloud-hosted offerings.

“Australian business are just not able to guarantee their customer data security if it’s hosted offshore,” he told Lifehacker. “Latency and data sovereignty are the two big things.”

As we’ve noted before, concerns about where data resides don’t always match with legal reality. So I couldn’t help but wonder: even if the hosting facilities are in Australia, does that make a difference if the software provider running on those systems is US-based?

Mills says there’s it does; the key distinction is who owns the gear, not what runs on it. “The fact that we’re Australian-owned and we own the facilities is sufficient,” he said. “We cannot be instructed by the US government to give up that information, whereas a US hoster with a Sydney data centre could. That’s a hard line in the sand and we have independent legal advice on it.”

Legal issues aside, being able to deliver high-speed services also matters, Mills said. “We do a lot of research with our SAAS customers, and the topic of user experience just continues to come up. When something’s 10 times faster it is a real benefit. In house, we use Salesforce.com [hosted out of Singapore], and I’m counting while that screen refreshes.”