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What would Brexit mean for IT businesses?

Tamlin Magee | June 24, 2016
As the weeks roll towards the day of the EU referendum, we take a look at what a 'Brexit' could mean for business

According to VMware's chief technologist EMEA for vCloud Air, Richard Munro, a UK exit could spell stricter, more independent data laws that businesses have to adhere to - including an effective requirement to keep UK data on UK soil.

In such an instance, businesses would have to conduct an audit of their data to understand exactly where everything sits.

But recent research from VMware claimed the majority of UK organisations cannot say with confidence where their data is stored. Only 10 percent of those surveyed were in the position to bring that data back to UK soil if needed.

"Organisations will need to poll their cloud suppliers to check exactly where their data may be stored, and that if it is the UK, that the provider can guarantee it stays there," says Munro.

"The IT hosting industry also needs to recognise these changes - being clear about their own service's data governance model is the only way customers can understand if they need to consider the impact of using the service on their own compliance requirements.

"Cloud interoperability remains a mainstream challenge, and our survey also showed customers felt it would cost an average of £1.6 million to change their service provider to a local, UK-based alternative."

Brexit for business: Reputation

Attracting both workers and businesses to Britain could also prove difficult.

Tech London Advocates warns the capital's reputation as a European centre for digital is at risk.

"There is significant concern Brexit would undermine this position and threaten relationships with the European market," Russ Shaw, Tech London Advocates founder, says. "Brexit could see global businesses locating in emerging digital hubs in Berlin, Paris and Stockholm rather than London."

According to Quocirca's Clive Longbottom, it would make life "far easier for EU companies to focus on their open market, pushing skills around the remaining EU, rather than bothering with the UK."

Monaghan of Pinsent Masons shares the concern that there could be a "significant period of uncertainty" while negotiations are concluded - a period that "might be extended if the exit of the UK led to a rolling wave of exits or threatened exits."

"It is quite conceivable that there would be a logjam on both sides - in the UK parliament, as it struggles to deal with the implications of the UK's new status," he says. "And in the EU where there might be more pressing immediate concerns than trade with the UK."

Brexit for business: Trade

The majority of members of British trade group Tech London Advocates, comprising 2,500 from the capital's technology sector, believe leaving the EU could have an immediate negative impact on supply and trade.

Three in four surveyed members feel that Brexit would make reaching customers in EU countries more difficult - and potentially threaten relationships with Europe-based suppliers.


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