US Cloud computing provider Rackspace has announced its first Australian data centre, a multi-million investment to be located in Erskine Park, West Sydney. Rackspace officials said the opening is in response to demand from Australian customers to keep data within national borders. "Rackspace will not transfer customer owned data from our Australia data centre to a law enforcement agency of another country including the US without a customer's consent unless it is compelled to do so by Australian law," Rackspace general counsel Alan Schoenbaum said according to the Australian.

The new data centre, in the final stages of construction, will be Rackspace’s ninth in the world, and it expects to switch on its first customers over the data centre late this year, the  company said. The data centre is being built by Digital Realty. “This will represent an over tens-of-millions dollars ... long-term investment over the next ten to twenty years,” said the company’s managing director for Asia Pacific, Jim Fagan. The company plans to immediately offer its enterprise managed virtualisation product, and “over the coming months” introduce the rest of Rackspace’s products, including OpenStack, he said.

Rackspace said that it sees Australia as “one of the most mature IT markets” in the Asian-Pacific region. The company has had business in Australia for a decade. “However, 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 here on shore.”

New South Wales Deputy Premier and Minister for Trade and Investment, Andrew Stoner confimed that the New South Wales government helped secure the deal in Western Sydney with payroll tax rebates. The data centre is expected to create 50 jobs over three years in Western Sydney.