Internationally acclaimed market research firm Gartner predicts that Britain’s vote to exit the European Union will suppress global IT spending for this year, as companies cut back spending due to the uncertainty about what future could bring them in coming days. Prior to Brexit vote, Gartner had predicted worldwide IT spending to be flat in 2016.
“The cut down on IT spending is for sure in UK and that can put a negative influence on the IT spending on a worldwide note”, said Gartner Analyst John David.
UK is touted as the third largest IT market in the world and Brexit could change the face of economy in this current financial year.
As Brexit hits the British pound on a negative note, vendors will have to raise prices in Britain. This will automatically push the companies to either postpone their IT plans or cut down their spending by even fifty percent.
Already, Dell has increased its PC costs in Britain from early last week as consumers in Britain will have less buying power from now on due to their currency demise in international markets.
Brexit has not only ruined the financial markets in Britain but has also caused political chaos in UK.
Remember, this is just the start as the UK government hasn’t yet started the process of leaving the EU, which will lead to a series of negotiations to establish new rules for a variety of matters, including how UK will deal with EU data protection laws. The decision could affect where new data centers will be located, and thus have an impact on future IT spending.
Mo Tahmasebi, CEO & President of DNF Corporation which offers IT infrastructure and services on a worldwide note sees the development with a different perspective. He added that Brexit comes at an interesting time for the IT market overall. The drama is unfolding against a backdrop of transformation in computing, as companies try to take advantage of cloud and mobile technologies to cut costs and improve productivity. In the UK at least, some of those investments may be reduced or put on hold as the Brexit plays out.
Tahmasebi feels that the influence of Brexit will be temporary on the world economy and more on the British populace. He agreed that the spending on IT infrastructure might pause for a while in Britain, but will not stop on a permanent note, as what was witnessed after 2008 recession all around the world which lasted for four complete years.
Mr. Mo feels that the day all new data protection formulations come into practice, Britain will start fresh to comply with them. Data center spending will increase on a gradual note as all companies start functioning as per the latest rules. Infrastructure demand will grow and will see vendors rushing in to serve the complaint solutions as per the prevailing economic reforms.
So, good news for all those companies offering IT infrastructure…..isn’t it?