Even though the encryption is done on-device so the company is unable to decrypt the data, some organisations are concerned about it being stored offshore.
"Australia a a very important market for us," LogMeIn identity and access management business general manager John Bennett told iTWire. It is the company's fourth largest market after the US, Canada and the UK.
Initially, an organisation's LastPass administrator has to ask their contact at LastPass to initiate the change. This approach was taken in order to roll out the option on a timely basis, Bennett said.
The company may in time make this a self-service process, but that is not currently on the product roadmap, he added.
Similarly, consideration is being given to extending onshore storage to non-business (free and paid) LastPass customers, but Bennett again emphasised there is no commitment or current plan to do so.
"Feedback from our customers and prospects told us that while our zero-knowledge security design is excellent, having the LastPass password vault data stored in region would add an important dimension to the overall service", he said.
"We get it. Knowing where data resides is very important and having it stored in region could help local organisations comply with current and future regulation. We're pleased to make our local data centre offering available to all new and existing customers."
The news was welcomed by LastPass customer Ventura Home Group. CIO Craig Purser said "Having LastPass vault data stored on Australian servers gives the Ventura Home Group certainty on what laws are applied to our data and in which jurisdiction we operate in. LastPass continues to align itself with our values and strategies towards security and data sovereignty."
LogMeIn APJ vice-president Lindsay Brown said: "Every data breach that is publicised diminishes customer trust and it's not easy to replace. More businesses are taking steps to avoid becoming the next headline. Knowing where your data is being stored is key to maintaining a good security posture. Our new security infrastructure means that you can now choose to have your LastPass Enterprise password vault stored regionally in Australia, regardless of where you operate your business from."
Earlier this month, LastPass announced the addition of single sign-on and multi-factor authentication to its business products.
LastPass Enterprise (still US$6/user/month) will soon include SSO with more than 1200 pre-integrated applications, while LastPass MFA (US$3/user/month) "offers biometric and contextual factors to ensure the right users are accessing the right data at the right time, without added complexity," according to the company.
LastPass Identity (US$8/user/month) combines LastPass Enterprise and LastPass MFA.
These new capabilities will be available from 1 July.
Organisations realise they need to improve security in this area, while providing employees with convenient access to applications, Bennett told iTWire.
LastPass's products are easy to deploy without the need to engage additional staff or professional services providers, he added, making them suitable for businesses of all sizes.
The company recently opened a new office in Sydney, and is in the process of doubling the number of employees. "We've made a real commitment to this market, he said.
Bennett stressed that the new hires aren't just sales staff – they also include people working in support or customer care, so "we get feedback directly from customers."