Australian organisations have spent the past decade embracing cloud and software as a service (SaaS), yet many chief information officers (CIOs) still find themselves constrained by where their critical data and systems live. As they move into the next phase of digitalisation, with artificial intelligence (AI) and automation embedded into frontline services, the physical location of infrastructure has shifted from a technical detail to a board-level issue.
For Australian enterprises and public sector agencies, the challenge now is how to capture the benefits of SaaS and AI while keeping a firm grip on data residency, latency and operational resilience. If Australia is to deliver on its ambition to be a leading AI economy, these foundations matter. AI-powered services rely on fast, high-quality data, which is increasingly flowing through observability and IT management platforms. In this context, local cloud and SaaS options are becoming the underlying infrastructure for Australia’s AI-enabled digital economy, not simply another sourcing choice.
Sovereignty is a performance strategy, not a policy tick
Data sovereignty is often framed as a compliance issue. In practice, it is equally a performance strategy, especially in the age of AI. Keeping data and services on shore shortens the path between users, applications and the systems monitoring and optimising them. This reduction in distance lowers latency and leads to smoother digital experiences, which is what customers feel.
In conversations with boards, the narrative is shifting from ‘we need data in Australia to satisfy regulators’ to ‘we need data in Australia so our digital and AI-enabled services feel fast, modern and trustworthy’. When traffic for critical monitoring, analytics and AI workloads traverses the globe, it can add latency that shows up in page loads, AI-infused chatbots, recommendations and real-time dashboards, so many organisations now want the choice to keep more of this traffic local when it matters.
The SolarWinds SaaS data centre in Sydney complements existing regions in the Americas and Europe and gives Australian organisations the option to keep observability data in the country while consuming it as SaaS. This local capability provides a stronger foundation for AI for IT operations and automation. By bringing the monitoring plane closer to the workloads it watches, it reduces the time between an event occurring and an AI engine seeing it, keeping more operational data within Australian jurisdiction. In effect, it turns observability into part of the sovereign AI stack instead of being a service hosted off shore.
What CIOs should be asking their partners
For Australian organisations reviewing their technology stack, a few design principles are emerging as best practice.
First, local by default, global by design: SaaS platforms should offer in-region hosting options, without locking customers out of multi-region architecture where these add resilience. The key is choice. Critical observability and AI operations data should be able to stay on shore by default, with clear options to span regions when global scale or failover is required.
Second, security, compliance and AI safety by design: providers need to map their controls to Australian regulations and be transparent about how they manage third-party dependencies. SolarWinds has codified its Secure by Design and AI by Design principles, which make security, resilience and responsible AI default considerations across product development and operations, not simply afterthoughts.
Third, hybrid and multi-cloud awareness: tools must treat on-premises environments, private cloud and public cloud the same way, regardless of location, instead of assuming a greenfield cloud-only environment. For AI, this hybrid awareness is essential.
Finally, customers should look for providers that treat operational resilience as a shared journey, not a checkbox exercise. Open integrations and clear roadmaps for regional investment signal a partner’s understanding of local needs. Increasingly, those roadmaps should also show how the provider will support emerging AI use cases in the region so AI-enabled operations can grow on top of a stable local infrastructure base.
Anchoring Australia’s digital future closer to home
New local SaaS services in Australia are part of a broader shift towards treating digital infrastructure as a strategic asset, not simply an IT line item. They complement national efforts to build sovereign AI capability through investment in infrastructure, secure data centres and a skilled workforce.
As Australia moves further into the digital decade, choosing the right infrastructure partner – one that understands both performance and policy and evolves its platform to support the local vision – will be key to building a future-ready business designed to scale AI at speed.