BREXIT Effects

Serviceteam IT UK Cloud Snapshot Survey 2017

The predicted immediate economic slump has not materialised but there are growing signs that the uncertainty around BREXIT is having a detrimental effect on UK business. BREXIT was identified as the third most pressing issue after GDPR and cyber-security for respondents to the survey conducted by Serviceteam IT.

Will data sovereignty be an issue as a result of BREXIT?

Although cyber-security and GDPR affect more countries than simply the UK, the BREXIT effects is an issue that will have an impact on UK firms in particular, given the specificity of Brexit to the UK. Our research provides an important insight into the challenges facing UK businesses and therefore fills an important gap in previous research publications. Uncertainty was a common feature of the interviews conducted as part of the research for this report. Out of all the interviews conducted there was no clear idea of the impact of Brexit regarding this particular issue. This suggests that businesses in the UK may need to be made more aware of the problems relating to data sovereignty in light of the future changes in Europe.

The companies were asked if they felt that BREXIT would introduce data sovereignty issues. Just over a third, 37% said no. 21% said they believed that it would cause data sovereignty issues but the largest group 42% were unsure. Again, this is another example of the uncertainty around the BREXIT effects and its knock-on effects to IT operations and planning.

37% believe Brexit has no impact on data sovereignty

Yes: 21%
No: 37%
Unsure: 42%

Do you believe that there will be a data sovereignty issue as a result of Brexit that may require you hosting all relevant services in the UK?

63% said BREXIT intensified their concerns about data location

86% feel it’s important to locate data in the UK

BREXIT will have an impact on data sovereignty, with only 37% believing that it will have no impact. It is possible that the UK could impose rules similar to those that exist in Germany, stating that data must be held within the UK currently, for example. The law stipulates a number of things, such as the need to have data stored in the UK if it is financially sensitive.

A survey from Vanson Bourne backs up our own findings suggesting that 86% of respondents felt it was important to locate their data in the UK. And in the Autumn of 2016 a 4D survey found 63% said BREXIT effects has intensified their concerns surrounding data location and sovereignty even further.

Sovereignty of data is of great importance to all businesses, primarily because the laws governing access rights differ greatly from country to country. A good example of this is the United States where access to data held in country, even if stored by an international business, can be freely gained by federal agencies through their Patriot Act.

Amazon, Microsoft and Google have all opened UK data centres for their cloud offerings and while they say this is to serve local markets better it also helps UK businesses after BREXIT.

Which external factors will impact on IT over the next 3 years?

When asked about the external factors threatening their IT strategy, only 19% of respondents highlighted the BREXIT effects as the greatest challenge to their IT plans despite the huge changes this is likely to have in the UK.

When divided into the individual sectors however, a divergence in opinion as to which external factor would be the most challenging for firms could clearly be identified. 68% of the respondents from the marketing and advertising sectors highlighted BREXIT effects as the biggest challenge to their IT plans over the next 3 years. Similarly, BREXIT was seen as the greatest challenge to IT plans by close to 70% of the respondents from the scientific research sector.

19% of respondents believe BREXIT is the greatest challenge to their IT plans

Brexit: 19%
Cyber-security: 21%
GDPR: 60%

Which external factors do you feel will have the biggest impact on your IT plans for the next 36 months?

BREXIT looms large over business and will continue to do so. Its impact will be felt for years beyond 2019. For many businesses this will be positive, opening up new opportunities, though for others, the change will be more than just disruptive, it will be destructive and they will not survive. The government is moving toward the concept of a transition period which will ease the impact but as there is currently no certainty of what the final agreement will be businesses are going to have to continue to plan without all the facts. This is already impacting recruitment and it will start to impact projects over the coming year.

Perhaps the flexible nature of the cloud is exactly the right technology for these uncertain times of BREXIT effects.