Image: Supplied

Microsoft has announced the launch of two new Australian datacentre regions at Canberra Data Centres (CDC) to offer Australian governments access to Microsoft Azure from early 2018.

CDC built its facilities in advance as top secret, which allows Microsoft to offer services from within CDC, inheriting the characteristics already in place and thus complying with Australian government requirements.

Speaking with ZDNet ahead of the launch, Microsoft Azure Engineering Lead for Australia James Kavanagh said the two new regions in Canberra will focus on the needs of government and their suppliers and will complement Microsoft's existing cloud services currently delivered from Sydney and Melbourne.

"It opens up a lot of interesting possibilities. As a region pair in Canberra, with a very close distance between those two, we can have most mission-critical systems that government can migrate into for Australian Unclassified DLM and [are seeking] Protected-level data storage," Kavanagh explained.

CDC has been operating for around 10 years, and now boasts a large portfolio of datacentre assets in Canberra split across two separate campuses, founder and CEO Greg Boorer told ZDNet. Soon, Boorer said CDC will house more than 60MW of datacentre capacity in Canberra.

"We've established a secure, trusted foundation that's used by the vast majority of government and now, with this partnership, we think we can unlock a lot of the potential of that foundation and the ecosystem of all those government agencies and the vast data lakes and oceans that they have," Boorer said.

"We've got 40 government departments and agencies, that do services to around 80 government agencies out of our facilities to-date."

CDC signed a deal with Optus Business in June that will see the telco's business arm offer up its secure private cloud service to Australian government agencies. CDC is 49 percent owned by the Commonwealth Superannuation Corporation, which provides super services and products to Australian government employees and employers.

Australia Central 1 and Australia Central 2 will be respectively located in Fyshwick and Hume in the Australian Capital Territory.

Microsoft announced the ability to order Azure Stack in July, describing the offering as "an extension of Azure".

Azure Stack comes in the form of an appliance built to run on specific server hardware. It provides customers with many of the pieces of Microsoft's Azure public-cloud platform in a form they can run inside their own or partners' on-premises datacentres.

Tuesday's news follows the official accreditation from the Australian Signals Directorate (ASD) in June that saw the country's intelligence agency formally certify 50 services on the ASD Certified Cloud Services List across Azure and Office 365.

At the time, Kavanagh, as the company's Australian national technology officer, told ZDNet there were services "coming downstream" to allow government organisations to "go beyond" just the unclassified data route.

As the new offering from Microsoft allows the tech giant to skirt the legislative roadblocks that previously prevented it from providing protected-level services to Australia's governments, Kavanagh explained that its partners will also reap the rewards.

"Many of our partners are seeking to serve the federal government, but the challenge for them is how do they deal with the compliance, certifications, and challenges of that around their personnel and so on," Kavanagh said. "But we build the foundations, CDC provides the infrastructure foundation -- we provide the software platform and they can innovate on top of that."

"We'll partner and work with anybody if it's what the customer wants us to do -- that's our guiding principle," Kavanagh added.

According to Kavanagh, the government spends between AU$6-9 billion a year on IT, but less than 1 percent of that is actually spent on anything cloud-related.

"About 80 percent of that IT spending goes straight into keeping the lights on, about 30 percent gets spent on small, incremental improvements, so there's 9 percent left for any kind of transformation or interesting things that we're all asking for," Kavanagh added.

As a result, the tech giant has touted its announcement as a means to accelerate the digital transformation of all levels of Australian government.

While no government customers have been announced, Assistant Minister for Cities and Digital Transformation Angus Taylor is quoted by Microsoft in a statement on Tuesday as saying that global innovation in areas such as cloud technology is an essential foundation for the transformation the government is talking about embarking on.

Kavanagh and Boorer explained the digital transformation of Australian organisations in the Microsoft cloud is already happening, with the Department of Immigration and Border Protection using Dynamics 365 and Microsoft Azure for streamlining Australian Border Force cargo inspections.

The Department of Industry, Innovation and Science was one of the first federal agencies to jump on board with Microsoft Azure, and one of the first government departments in APAC to roll out Dynamics365.

Emergency services in Queensland, New South Wales, and Victoria rely on Microsoft Azure and Microsoft Office 365 to respond in the event of natural disasters; while the new Bendigo Hospital in Victoria is also delivering care via Azure.

Boorer said the offering will also open access to government for startups, as accreditation required to work with the government is both expensive and hard to achieve for companies at such an early stage. The overhead from startups and the like is minimal, with CDC and Microsoft already covering the majority of costs involved.

The ASD awarded protected-level certification to Australian-based Sliced Tech and Vault Systems in March, allowing the local players to store the highest classification of government information in their respective cloud platforms.

At the same time, the signals directorate recognised a total of seven companies for unclassified DLM status: Amazon Web Services for its EBS, EC2, S3, and VPC offerings; Bluemix by IBM; GovZone from Macquarie Telecom; Microsoft with its Azure cloud, Dynamics CRM Online, and Office 365 platforms; Salesforce with its platform-as-a-service and infrastructure-as-a-service offerings; SliceTech's SaaS cloud; and Vault System's SaaS cloud.

In a statement, Vault Systems CEO and founder Rupert Taylor-Price welcomed Microsoft's leap into the government cloud market.

"Vault believes that this investment is a positive outcome for the Australian government and validates the need for cloud providers to specifically address the requirements of the Australian government," Taylor-Price said.