While the actual costs of Rackspace services are expected to be largely similar to those charged for using the company’s overseas data centres, overall charges will be higher because bandwidth costs in Australia are “magnitudes larger” than those charged overseas according to Mark Randall, Rackspace’s country manager for ANZ.
Jim Fagan, managing director of Rackspace in Asia Pacific, vising Sydney from Hong Kong for today’s announcement, acknowledged that the local service would be more expensive than Rackspace’s international offering but argued that it would not place the company at a competitive disadvantage because it would be competing with other providers also subject to local bandwidth costs. He noted that the bandwidth issue was already an inhibitor for some software as a service providers, which had to take smaller margins as a result.
Asked whether the arrival of the national broadband network would make much of a difference, Mr Randall said that while it would likely drive the overall growth of the digital sector “we are not banking on 100 megabits to the home.
“The NBN is there as a backdrop...a long term positive but not something you are going to base your business on.”
The company today said that if Rackspace was approached by US Authorities seeking access to data held in the Australian data centre, that would not be granted without the express permission of the client or the Australian authorities.
While the risks of data access by US cloud providers through the US Patriot Act have been somewhat overblown, it is unclear exactly how Rackspace might be able to sidestep the process if it was asked to provide access to its international data centres under the provisions of that Act.
The company however issued a statement from its general counsel, Alan Schoenbaum, saying that; "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."