Cloud-focused channel firms could be sheltered from the worst of the uncertainty and expected price rises fuelled by Brexit, according to channel experts, who claim offering flexible billing and not relying on hardware could protect them.
The value of the pound has plummeted since the UK voted to leave the EU on Thursday and markets have been shaken by the news, which came as a shock to many.
The falling rate of sterling has led some channel players and analysts to suggest price rises are on the way, because much of the UK channel buys in dollars from US vendors and sells in pounds in local customers. On top of this, customers across the board are expected to hold back on investing amid significant uncertainty.
But some optimists in the channel have said that resellers focusing on cloud may be immune to at least some of the issues.
Stuart Fenton, CEO of QuantiQ, told CRN that although cloud players will still be affected to some extent, they could be better off to begin with.
"I genuinely believe that hardware is mostly priced in dollars, therefore [the price] will mostly increase," he said. "Cloud providers are all growing, and they will all need to add technology, and that will be in dollars. So of course there will be an impact – albeit less of an impact – because it will be blended across their existing estate.
"They probably have more flexibility in the short term."
Quocirca founder Clive Longbottom (pictured, below) agreed and said resellers that rely on making a margin on hardware, not services, will bear the brunt of the Brexit blues.
"Those who are more solutions oriented will be able to say 'OK hardware has gone from being 15 per cent to 20 per cent of the total cost, but that's not so big over the whole contract'," he said. "Whereas the other way around, if the hardware is 90 per cent of the cost, then sorry, you're going to really notice that on the bill now."
Cloud services are not new to the channel and many companies have been transitioning towards the technology, and away from traditional hardware deals, for a number of years. Many firms have found it challenging to move from a model of fewer, bigger, tech contracts, towards smaller, monthly bills.
But according to Barracuda Networks' EMEA director of MSP solutions Jason Howells, the new model could protect them from any issues arising from Brexit.
"I think the channel has been smart enough to know that if they're not offering services to their customers today, then by the end of the year or certainly in the foreseeable future they will need to," he said. "In the future, businesses don't want to make huge investments and won't have the time or inclination to invest in IT.
"For people to have the ability to pay on a monthly basis, there is far less risk than paying for something upfront."
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