Macquarie Telecom is significantly ramping up its SaaS hosting business as more Australian government and business customers demand lower latency and locally hosted options for their cloud apps and data.
According to the company's head of digital and SaaS hosting, Stuart Mills, Macquarie has for the last 18 months been focusing on attracting major vendors and enabling them to host SaaS versions of their products which are in demand, particuarly among small and medium businesses.
The latest such vendor for the Macquarie to sign is BMC Software. The company's deal with the vendor will see Macquarie host BMC's Remedy OnDemand product, which BMC's channel partners and direct sales will then resell as local SaaS product.
"What's interesting in our market at the moment is the SaaS adoption curve," Mills said. "We are seeing rapid growth of SaaS adoption in this country; probably more than any other country in the world.
"Particularly for international software vendors such as BMC, their customers here are saying that they want to use their software, we want to move to a consumption model, but we need it hosted locally as well."
In addition to Remedy OnDemand, Macquarie will also potentially host SaaS versions of BMC's datacentre automation, monitoring and management applications, and predictive modeling for hardware failures.
Data sovereignty and latency issues associated with software hosted offshore were the two major drivers for this, Mills said.
"Australian businesses are just not able to guarantee their customer data security if it is hosted offshore — the banner of data sovereignty," he said. "It is a bigger issue than it might sound, and was one of the primary reasons why BMC has made the investment to have Remedy OnDemand in Australia. They already have it in other parts of the world.
"The other issue is user experience. If you want to do a screen refresh from here to the west coast of the US, that process is quite slow. Like in e-commerce, if your screen is not refreshing in sub-millisecond times, you are off and somewhere else."
Mills claimed that in moving BMC's hosted software to Sydney, the reduction in latency would be in the order of at least ten times, or reducing refresh times from roughly 300 milliseconds to about 20 milliseconds.
In hosting BMC's software locally, and in being offered using the SaaS model, Mills said he expected the software vendor would begin to make greater inroads to Australia's SMBs.
"[SMBs] are something we are familiar with; we service that market directly and we will help BMC grow that sector of the market," he said.
Commenting on the partnership with Macquarie, BMC's VP Asia Pacific, Chip Salyards, said that in de-listing from the Nasdaq and going private, the company could now invest in growing its SaaS business through partnering with local hosting providers.
"We build, we sell and we implement software. One of the things we don't do is operate," he said. "That is a new thing for us, so we went to one of the companies that we believe is one of the best operators of [IT] infrastructure."