Sovereignty & Security
The ability to store and manage data from within our own shores is a national security requirement. But as the Australian Strategic Policy Institute pointed out in November [1], as a critical consideration for compliance with local and global data protection standards, Australia is highly dependent on offshore data storage systems for even some of its most crucial data assets. While this is a consequence of the advent of cloud computing, sovereign AI won’t be sovereign if it relies on foreign data. It must be fed by data that’s in Australia.
W.Media caught up with Accenture datacentre and cloud transformation architect Ben Peskin at the Melbourne Cloud and Datacenter Convention to discuss sovereignty and how the growing deployment of AI and digital technologies will be managed in terms of their strong reliance on considerable volumes of data in the cloud.
Peskin highlighted that unlike some countries, the Australian government as an enormous buyer of technology, is very interested in sovereign cloud solutions and this will influence what private companies do with their data. “The federal government has always been risk averse in this sense,” he said. “They look at the ongoing threats of cyber warfare and not wanting to be reliant on an offshore competitor, or even ally…as the current political trends go, suddenly putting crippling effects on your ability to deliver critical services.”
Companies are now having to think about the financial impact global politics. Peskin explains that what was once a distant concern – cloud or data sovereignty – has become a pressing issue due to geopolitical uncertainty. Organisations can no longer rely on offshore services, prompting a shift toward onshore solutions. This demand extends to SaaS providers and where their data is hosted. He noted that public cloud providers are already responding, investing in regional infrastructure and availability zones – such as AWS and Azure expanding into Melbourne – to meet sovereignty requirements. Peskin said this trend will grow, creating a “sovereign cloud identity,” with providers
better positioned to demonstrate compliance security, and government-aligned standards based on their experience.
“I think Australia is very well positioned because there’s so much demand for technology onshore that unlike some other parts of the world, where they’re much more reliant on inter governmental relationships,” he said.
He pointed to the UK leaving the EU as an example of hyperscalers needing to develop sovereign cloud options for those markets. Australia’s distance from its neighbours, he said, played into storing data locally to overcome latency. “Now it is just a matter of can we also deliver the resiliency that you need onshore too?” he said.
Ben Peskin suggests that we’re moving toward a world where data sent from overseas will be controlled by the originating countries sending it out. He points to shifts in regions like Hong Kong and Singapore, where global banks are relocating from Hong Kong to Singapore in anticipation of restrictions – such as the Chinese government potentially no longer allowing data to leave.
He believes Australia may be less dependent on such external data sources, aside from global data feeds. However, businesses will need to assess their specific dependencies. As a result, Peskin sees growing demand for storage that’s onshore as organisations reduce critical reliance on overseas data and increasingly cache information locally.
Cloud is not just a hyperscaler product
Peskin said that cloud technologies are at the forefront of generative AI adoption, particularly in infrastructure, platform and SaaS domains. Organisations building GenAI solutions already rely on cloud providers for GPU-heavy processing. Looking ahead, he foresees “GenAI-enabled tools” increasingly guiding infrastructure setup, such as helping developers design landing zones in public cloud environments – part of a broader trend toward simplifying and accelerating cloud
adoption.
He emphasised that cloud, at its core, is a “deployment philosophy,” not just a product from hyperscalers. However, many organisations face challenges when their workloads aren’t cloud native. Instead of refactoring applications for the cloud, some have lifted and shifted legacy systems, creating inefficiencies. This leads to risks such as being stranded in poorly suited environments or becoming locked into a single provider due to reliance on proprietary tools.
On hybrid cloud, Peskin said that while it has long been a dream, it’s now becoming more viable, including not just private-to-public but also public-to-public cloud configurations. He gives an example of a client using both Google Cloud and Azure for different parts of their business, needing unified infrastructure support. Successful hybrid strategies depend on layering tools above infrastructure to maintain flexibility and even “build competitive tension between providers”.
He stressed the importance of understanding stakeholders when planning transformation. Many barriers are not technical but organisational, such as persuading internal business units to change or modernise legacy applications. “Nothing is ever truly like-for-like. It’s always like-for-like for whom?” He said. Making a strong business case that includes the entire enterprise – not just IT – is crucial for successful cloud migration.
My precious data
As data becomes more valuable in the AI era, Peskin believes data governance must also evolve. Organisations need to treat all data as potentially “precious”– even if it doesn’t seem useful today. Decisions around deletion, storage tiering and data retention need to be reevaluated to account for potential future uses, especially as businesses explore ways to monetise historical data sets.
Cloud providers, he said, are already adapting to digital transformation, but competitive pressure will accelerate that. They are motivated to “peel off” customers from competitors by offering attractive incentives. Enterprises, in turn, must ensure their infrastructure choices don’t lock them into expensive, inflexible architectures. Infrastructure leaders should seek “partners that can carry their business case for the next five years” while delivering greater efficiency from limited capital.
Author: Simon Dux
Ben Peskin was interviewed on stage at the Melbourne Cloud and Datacenter Convention in April 2025.
The Sydney Convention 2025: “Cloud & Datacenter in Transition” takes place at the Sydney International Convention Centre on 21 August 2025. To find out more and to register go to:
https://clouddatacenter.events/events/sydney-cloud-datacenter-convention-2025/
[1] https://www.aspistrategist.org.au/a-sovereign-australian-ai-drive-needs-sovereign-data-centres/