Channel unfazed by latest political shock

Partners tell CRN that it is business as usual for the channel following shock General Election result

The channel remains unfazed despite the latest instalment in a line of political upsets, with the Conservatives failing to reach a majority in parliament.

The shock General Election, and resulting hung parliament, comes in a 12-month period that has seen the UK vote to leave the EU and Donald Trump become US president.

Despite the current political uncertainty, the channel remains bullish in its business-as-usual approach, much as it did after Brexit.

Terry Betts, managing director at reseller CCS Media, said that the uncertainty around Britain's political future could provide an accidental benefit for the channel, in the form of price rises after the pound fell so heavily in the wake of the election.

"Prices may go up but for the channel and that's not always a bad thing for us," he said.

"We suffer from too much deflation, whereas these days we have inflation which is unusual for us. It means we can basically sell less units and make more money. I'm open minded but I think business will just continue for a while as normal."

Betts added that May's diminished power in parliament could also ease the minds of those concerned at the prospect of a hard Brexit.

"The uncertainty may not be as bad as people think. It might mean a bit more of a soft Brexit so if anything people might feel more comfortable," he said.

"Everyone will predict doom and gloom, but we'll have a couple of days of uncertainty and then everyone will just get on with it."

Lawrence Jones, CEO at UKFast, said that a hung parliament is a good thing for the IT industry because it makes it more difficult for May to attempt to push through any potential laws regarding encryption and building backdoors for government agencies.

"While it's a hung parliament it also means that no one politician can railroad potentially bad ideas," he said.

"In a way for the IT industry it is a good thing because there is no way she can ban encryption and get that through a close parliament, and thank God because that [would be] an absolute mistake it and [her recent speech] showed that she didn't have an understanding of the internet.

"I would imagine if she had a larger majority she could have railroaded a lot of these plans through, but now she has to work and be more collaborative."

A recent poll by CRN found that 57 per cent of respondents saw an increased majority for the Conservatives as the best possible outcome for the channel, with a hung parliament the least favourable option at three per cent.

Alex Tatham, managing director at distributor Westcoast, said the newly formed government merely adds another layer of uncertainty to already uncertain times.

"Theresa May's hubris has come home to roost," he said.

"It just puts another layer of uncertainty on top of all the uncertainty that we already have and that's not helpful for anyone. I think it will be interesting to see what happens next."

Dan Scarfe, founder of Microsoft Azure partner New Signature, was hopeful that the fact May has looked to pull together a make-shift government so quickly will limit the impact the shock will have on business.

He said, however, that a falling pound is never good for partners like New Signature that rely heavily on their business with American companies.

"It's not all together surprising [that the pound has dropped]," he said.

"For organisations like us working with American-based organisations, any fall in the value of the pound is of course going to have a knock-on impact.

"It's not immediate because with the way these things are priced the corrections tend to come every now and then. Hopefully by the time any resetting is done the pound will have hopefully made up the ground again, but it will have a real impact on our customers if that doesn't happen, of course."

Neil Murphy, managing director at reseller Bytes Software, said he expects to see no impact on the channel, other than relief that the election process is now over.

"I'm pleased the whole process has come to a conclusion so we can stop being distracted and we can get back to business," he said.

"There have been some shocks [over the last 12 months], but despite that our sales revenues are up 30 per cent in the first quarter this year. That's because we're doing the right things, but if that's indicative of what we're seeing across the reseller sector then all this distraction doesn't seem to have had an impact.

"It's been on people's minds as to what the outcome will be, so finally it's been decided. As May said ‘let's get on with it now'."

Ian Mann, CEO at security consultancy ECSC, said, however, that British businesses will still have a degree of nervousness as the government's Brexit negotiation strategy is thrown into doubt again.

"My main concern is it brings more uncertainty around Brexit process," he said.

"Having a clear Brexit strategy and a clear position, whatever that position is, to carry through negotiations is going to be easier if you've got fighting and disruption.

"The more businesses don't know what the outcome of Brexit will be the more it makes the economic difficult."