'No-deal Brexit could stop discretionary IT spend', Insight boss tells ECLF audience
But Emma de Sousa tells audience at CRN's European Channel Leadership Forum that 'Norway-plus' deal arrangement would have very little impact on business
Insight does not expect Brexit to impact its European business, according to UK boss Emma de Sousa (pictured), who also warned that a no-deal outcome could stifle the buoyant UK IT market.
With the result of Brexit still very much unknown, de Sousa told delegates at CRN' s European Channel Leadership Forum (ECLF) in London that Insight is preparing for three eventualities: a Norway-like relationship between the European Union and the UK, a postponement of Brexit and a no-deal outcome.
De Sousa explained Insight is not concerned about the impact each of these three results will have on the reseller's wider European business, but added that the potential effect on the UK is unclear.
"In the most part Insight sources locally and supplies locally [in Europe], so outside the UK we don't see an incredible risk to the rest of the business," she said.
"In terms of Norway-plus I think it would have very little impact on the business. If we look at the Norway-plus outcome the majority of the impact is political as opposed to economical so we wouldn't expect any major supply chain issues and there would still be free movement of people. All things considered, from our point of view that would be a preferable outcome."
De Sousa was however less optimistic at the impact of a no deal, which she said would likely tighten the purse strings of IT buyers.
"The other extreme is the implications around no deal and this is where we would have some major concerns," she said.
"From an economical perspective we would expect a short to-medium term economic shock with some medium-to-large devaluation in Sterling. Market confidence in the UK we would expect to decrease pretty significantly and of course we would expect UK spending to contract.
"In terms of likely impact of no deal on the industry we would expect discretionary IT spend to slow down or potentially stop, cost reduction we would expect to be the primary driver behind IT investment and we think it may accelerate a move to public cloud to the hyper scalers in favour of the local hosters."
Brexit aside, de Sousa said that businesses are already struggling to stretch their IT budgets, with 70 per cent of spend still going on the day-to-day running of tech.
"There is a dilemma that the CIO is facing between needing to keep the lights on and versus the focus on technology innovation," she explained.
"We know when we speak to CIOs they are under lots of pressure from CEOs to transform the business and uncover new revenue streams… but the budget left for IT to focus on innovation is somewhat limited.
"This presents opportunities for us. We all know customers are looking at business outcomes and they are looking for us to deliver end-to-end solutions.
"If you look at AI, if we can get the solutions right we can deliver brand new experiences for the client. We can take away day-to-day decision making from the process, freeing up the time for highly skilled workers to focus on mission critical imperatives."