Rackspace confirms dedicated Sydney datacentre


news US hosting giant Rackspace has confirmed plans to launch a large datacentre in Sydney later this year, to support growing local demand for its services after entering the Australian and Zealand markets in 2009 using its infrastructure located overseas.

In a statement this morning, Rackspace revealed the datacentre, based in the Sydney suburb of Erskine Park, is being built in partnership with datacentre specialist Digital Realty. “It’s currently in the late stages of construction and the first customers are expected to go live in late 2012,” said Rackspace’s statement. “To ensure it’s operated in the same manner as other Rackspace data centres, it includes security certifications upon launch for UTI Tier III Design and Construction, with certifications planned for SSAE16, ISO 27001, ISO 14001, PCI, and ASIO Intruder Resistant once fully operational.”

Rackspace is one of the largest global hosting companies, providing a range of services from eight existing datacentres located overseas. The company provides infrastructure services ranging from dedicated hosting to private and public cloud services, as well as application hosting — such as email systems.

The company said today that since formally entering the Australian and New Zealand markets in 2009, it had experienced “a significant increase in local customer numbers”. Prominent local customers include Rio Tinto, Telstra, Australia Post, Monash University, Tourism Queensland and more.

Mark Randall, country manager of Rackspace, Australia and New Zealand said: “Our local customers have learnt that Rackspace is synonymous with the latest in innovative cloud hosting solutions, but the key success driver that really sets us apart from the competition is our focus on service by providing customers with Fanatical Support. Australian customers love our support. It really has set us apart in an industry otherwise dominated by telcos, with support models that leave a lot to be desired.”

A launch event in Sydney this morning for the datacentre was attended by NSW Deputy Premier Andrew Stoner, who has emerged as a strong supporter of the state’s technology sector over the past several years. Stoner is pictured above (center) with Randall (left) and Rackspace Asia-Pacific managing director Jim Fagan (right).

“This is another Australian first for Sydney and New South Wales and fantastic news for our state’s reputation globally as the nation’s ICT and digital hub,” said Stoner in Rackspace’s media release. “Sydney and New South Wales are well-positioned for growth in the expanding global digital economy and Rackspace’s investment is another significant vote of confidence in our capacity for innovation and collaboration across the ICT sector.”

It appears from Rackspace’s statement that the company will be using technology from a range of global partners — “including Brocade, Cisco, Dell, EMC, Microsoft and Red Hat” in the fit out of the datacentre.

Critically for Australian customers, the company said it had recently begun offering customers agreements under New South Wales law, which meant they would be compliant with Australian national privacy standards. This arrangement will be extended to customers hosting at the new Sydney facility.

Alan Schoenbaum, General Counsel of Rackspace said: “Rackspace will not transfer customer owned data from our Australia data centre to a law enforcement agency of another country (including the United States) without a customer’s consent unless it is compelled to do so by Australian law. Data hosted in Australia by Rackspace is subject to the same laws as cloud services operated by wholly owned Australian companies.”

The news comes as a number of major companies have kicked off substantial datacentre investments in Australia.

In June, global cloud computing player and retailer Amazon confirmed that it had added an ‘edge’ location in Sydney to speed up the delivery of content to Australians, confirming a deployment model which was the subject of speculation some 12 months ago. In addition, other companies such as HP, NEXTDC and Metronode have recently launched major new datacentre facilities locally.


It is incredibly awesome to see major international hosting giant like Rackspace finally set up shop in Australia, and I can’t say how happy I am to see this happen. I had a conversation with Rackspace about two years ago over coffee where I emphasised that I wouldn’t take the company seriously until it had Australian infrastructure — a local sales team wasn’t enough. The company’s investment in this new datacentre infrastructure is a huge recognition of the value of the Australian market and the fast-growing nature of its digital economy. But more than that, it brings a top-grade commercial hosting player to Australia, which we desperately need more of.

One of the things which Rackspace does really well is automation and standardisation. Hosting in Australia is currently often a matter of either paying top dollar for hosting/cloud computing services which are managed primarily by humans (and often fallible and highly customised), or paying a lot less for a service which has more automation on the customer end but shitty customer service when it’s needed.

Rackspace gives you both, at a decent price. Because of their hugely scalable infrastructure and technical expertise with it, it’s my impression that you get automated tools which a lot of the existing hosting companies in Australia don’t give you. But you also get great customer service if you need it, which you occasionally will with any hosting system.

Along with Amazon, Rackspace is also one of the companies most commonly cited by web developers and IT startups as being the basic IT infrastructure platform on which they grow their company online. I anticipate the Australian IT startup ecosystem will quickly jump on board with the company. But it also does higher-end enterprise cloud computing and application hosting well; I’d anticipate that its name will be now added to the list of vendors consulted by CIOs for hosting and cloud computing needs — even CIOs in government now, due to the local datacentre. In general, I usually only hear good things about Rackspace from people who use them internationally, and it’s great to see a top-tier IT infrastructure company like this set up shop in Australia.

I can’t say congratulations enough to the Rackspace Australia team for making this one happen, and look forward to seeing what the guys can do with their brand-spanking new infrastructure. Nice one!!

Image credit: Rackspace


  1. “where I emphasised that I wouldn’t take the company seriously until it had Australian infrastructure”

    That’s an odd statement. Rackspace is one of the biggest hosting providers in the world. They’re the primary backers of OpenStack, they offer a range of services used by many large sites and customers, and their ‘fanatical support’ has a great reputation. Surely that’s enough for them to be taken seriously.

    The ‘demand’ for local hosting is a sad reflection on the Australian market. It’s almost entirely driven by data sovereignty regulation (mostly unnecessary) and Australia’s persistent high prices on international transit.

    We should encourage the use of international services, and stop waving the Australian flag at something as banal as hosting. Data is data…

    • Hey Yo,

      a lot of people agree with you, but a lot don’t. There are very many organisations and people (myself included) which would much rather see their data hosted in Australia and subject to Australian laws than hosted overseas. Like it or not, it’s a major issue here.


    • There’s also the issue of latency. A service hosted in the U.S. has a minimum round-trip latency of about 150-200ms. I’ve done comparisons on some of my websites between a U.S.-hosted server and an Australian-hosted one, and the difference is pretty dramatic.

      Of course, comparisons of this nature are hard to do apples-to-apples, but my experience at least is that Australia-hosted is definitely the way to go if you’re serving a largely Australian audience.

  2. They have yet to confirm that they are providing the services from this datacenter that will help the local industry the most.
    Their product details page only lists managed services and private cloud stuff.

    If their cheaper options (unmanaged cloud servers) aren’t available in Sydney this is just an effort to appease bigger customers, and wont do anything to improve things for local companies trying to use cloud services at the cheap end, such as cash strapped innovators building new ideas, early stage startups tight on funding, or tech hobbyists/students who want to use the services to experiment or learn using their own money.

  3. Also don’t forget regulatory issues around privately identifiable information (PII) and regulatory/legal issues alongside preference and latency. The certifications most importantly reflect operational behaviours (whether fanatical or not) that show operational prudence. A vital security component which is difficult to achieve, yet of such critical importance that a single failure can negate any amount of security investment if missed. It will be interesting to see how Rackspace intend to service New Zealand.

  4. I hope this includes Rackspace cloud backup services. Coupled with the NBN, I can see a lot more local players entering the market offering Australian backup services for small business and personal users.

  5. This is an interesting and good announcement … I’m with Renai in terms of seeing it as a good development and also that many folks will take comfort from the local footprint (rightly or wrongly). These vendors tend to bring an ecosystem along with them and their skills at selling the whole cencept of cloud services will help to stimulate the growth of this market. This is, however, just IaaS … which is concerned mainly with reducing costs in ways that is really only visible within the IT department.

    The main game in my view is SaaS/PaaS in terms of creating really new possibilities to access truely innovative bundles of people+process+technology as a catalyst for business innovation. It will be much more exciting, and transformative, when one of the leading SaaS providers decides to plonk a data centre in Australia …

    As an aside – what did folks think of the comments made by Jim Fagan, managing director of Rackspace in Asia Pacific, that the local services will be more expensive than the global services due to broadband costs? Is that right? Will this give the local telco+cloud services providers an edge?

    • “The main game in my view is SaaS/PaaS in terms of creating really new possibilities to access truely innovative bundles of people+process+technology as a catalyst for business innovation. It will be much more exciting, and transformative, when one of the leading SaaS providers decides to plonk a data centre in Australia …”


      I keep on nagging them about this at every opportunity ;)

      As for Jim Fagan’s comments, yes, I think this is accurate — Australians have always paid a lot more for local bandwidth than we do overseas. This has been one of the main justifications for high local hosting costs for years.

  6. It seems strange that Australia would in anyway against a move of this nature. Surely, it is an inevitable move and will help security? Hosting overseas and being subject to overseas data laws buts you in quite a precarious position, no?

    Thanks, Paul @ ConNetU

  7. Papering over the cracks.
    If a cloud vendor tells you that it’s OK now because they’ve opened a datacentre in your backyard, watch out. The mere fact of locating a datacentre in Australia will not remove the possibility of that company (say US owned) from being required to divulge your data under any one of a number of measures, most notably the USA Patriot Act. It’s true, governments do have bi lateral treaties for handling these sorts of requests normally, but those routes involve serious checks and balances.  The sort of friction that tends to be overlooked in the name of expediency.
    The real issues are in fact symbolised by the iceberg problem. The legislation and application of the Patriot “toolbox” are the known unknowns, visible above the surface. Lurking underneath and mostly unfathomable are the costs of not complying and the business disruption caused by duelling in an overseas jurisdiction, the unknown unknowns. No amount of risk management and business continuity can prepare a business for this sort of upheaval.
    No smart business would enter into such an uncontrolled experiment, as that is exactly what using an overseas owned hosting vendor would become.  US legal firms are advising clients in Australia to “consider the security and confidentiality risks posed by the Patriot Act and to store their data with providers which do not have any US connections.”
    The truth is, an unpleasant situation has yet to arise, therefore no one knows exactly how this might play out. Do you want to be the guinea pig? Prudent decision making dictates that this should be left for others. Why would you go there?
    Ask the vendor to provide and indemnity clause in their SLA with you that specifies they will cover your expenses etc for challenging disputed collection of data.

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