Microsoft will go live with locally hosted Office 365 and Dynamics CRM Online by the end of March 2015.
The software-as-a-service applications will be hosted at Microsoft's two local data centres in Sydney and Melbourne, which launched in October to house Azure Australia.
According to Microsoft, local hosting will "provide customers with faster performance, offer geo-redundant backup and help address data residency considerations".
Australian Office 365 users are currently hosted out of Microsoft's Southeast Asia region in Singapore. From March 2015, new customers will be automatically provisioned in Sydney and Melbourne, and existing customers will be transitioned across to the Australian points of presence, said Steven Miller, Office division business group director at Microsoft Australia.
CRM Online users will continue to be hosted in Singapore by default, but can opt for Australia hosting, in which case they will be given a transfer window, he added.
Microsoft has already notched up a string of top-flight accounts, such as Office 365 wins at Coles and the Queensland government, and a CRM Online rollout at the WA Mental Health Commission, for which SMS Management & Technology won a Microsoft Australia Partner Award.
Hosting the products in-country will enable Australia partners to "just deliver", said Miller – "to get past some of the conversations that relate to data sovereignty, that relate to the service as well, and just focus on delivering innovation and solutions for the customers".
Innovation among the Australian partner community is getting a boost with the launch of the Cloud Solutions Provider program (read more here).
Andy Neumann, general manager of Melbourne-based Microsoft partner OBS, which has been announced as one of the first Australian CSPs, said having Office 365 and CRM Online hosted in-country will mean "we don't have to deal with some of those issues that have been raised with us around data sovereignty or performance".