Federal and state agencies wanting to run AI inside their own security perimeter have a new sovereign hosting option. Macquarie Government has launched an Azure cloud, security and AI practice built for Protected-level government requirements.
Macquarie Government, part of Macquarie Technology Group, announced the practice this week. It extends the firm's cybersecurity capability, which it says services 42 per cent of federal government agencies, into public cloud and AI services for the sector.
The practice builds on the Azure managed services model run by Macquarie Cloud Services, one of four sovereign Azure expert managed service providers in Australia. Agencies can access services including Managed Azure, Microsoft XDR, Microsoft Sentinel, Azure Virtual Desktop, Azure Local and Managed Fabric, delivered under a co-managed model that keeps agency teams involved.
Azure Local, Microsoft's hybrid cloud solution, opens a path to sovereign, isolated AI hosting. It suits agencies that need AI without relying on frontier models or public cloud endpoints. Running on infrastructure with GPU capability, it lets agencies host private language models inside their own security perimeter.
Macquarie expects sovereign AI hosting to be one of the fastest-growing parts of the portfolio as agencies move from AI experimentation to production.
"We've spent years building and refining a Microsoft Azure practice that Australian businesses trust, now we're bringing that same depth of capability and hands-on delivery model to government," said Naran McClung, executive head of Azure at Macquarie Cloud Services.
The launch comes as Microsoft cements its position as a preferred government platform. It has signed a whole-of-government agreement with the Digital Transformation Agency and committed $A25 billion to Australian digital infrastructure. Many agencies have already migrated to Microsoft, shifting the challenge to transformation and AI adoption.
Macquarie Government said cybersecurity remained the top priority for agencies, with cost management and cloud governance pressing concerns as cloud footprints grow. It has appointed former Defence advisor Dr Chris Peiris as Microsoft security and Azure lead, based in Canberra.
Details of the practice are available at macquariegovernment.com.