Preparing to thrive in a post-Brexit world – a SaaS CEO perspective

A guest blog by Larry Augustin, CEO, SugarCRM

If there’s one thing that the technology industry has learned from the recent EU referendum, it’s to plan for the unexpected. However, despite the time my company invested in preparing for each potential outcome, I must admit that I’d assumed that the UK would vote to remain within the EU; my UK friends had told me that the result would be close and so it was, just not the way that anyone expected.

The past months’ uncertainty about the precise consequences of Brexit has challenged everybody’s ability to plan for the future. The UK’s new Prime Minster, Theresa May, has done everyone a favour by stating categorically that the decision to leave the EU is binding and there will be no change of mind or a second referendum.

From a business point of view, this clarity is exceedingly helpful. At the same time, we at SugarCRM are reassuring our customers that whatever the precise consequences of Brexit, our company’s commitment to the UK is both permanent and unambiguous.

I’ve been asked several times since the referendum if I have any advice to share with my industry colleagues that might help smooth the waters in these uncertain early weeks of the UK’s move towards Brexit. I think the most important thing we can do in our industry is not to panic. Things are uncertain and will remain so for many months, even years, to come but once we accept this we can begin to employ strategies to manage this uncertainty and find new ways for our businesses to thrive.

It’s true that EU has a significant impact on the IT industry; freedom of movement within the EU, for example, means that we can attract the smartest people from across the continent and have them join our teams the very next day. It seems certain that this is going to change post-Brexit and likely we will find it harder, in the short term, to recruit top-drawer IT brains. That said, this is an opportunity for companies to invest in, and nurture, the huge potential that I know exists within universities in the UK.

On a separate topic, data flow and security remain thorny issues and the on-going debate between the EU and US on “safe harbour” legislation has become a lot trickier post-Brexit. The inherent contradiction between national borders and data held on servers internationally means that negotiations to find a solution will continue to be slow and complex. I believe that it’s crucial for businesses to have flexibility in cloud options and the ability to adapt solutions to comply with local laws. It’s important to use modern SaaS companies that are able to employ different service providers in different countries to ensure that customer data resides where, and how, legislation allows. These companies are finding great success in operating their own clouds, both private and public, which enable services to be delivered securely and free of restriction.

The more legislation that occurs, and I think that this is inevitable post-Brexit, the bigger the challenge for companies employing older SaaS models as they are forced to navigate different legalities in different markets.  The cloud functions more efficiently when data loads can be shifted from one data center to another. Without the free flow of data, response times go down and costs go up.

Cool heads and a prudent attitude are required all round. Employers should look to reassure their employees, as well as their customers, and I’m certain that the vast majority of CEOs are already several weeks into a process of evaluation and planning for the post-Brexit world, just as we are at SugarCRM. Finally, let’s not forget that uncertainty is not necessarily a cue for panic or pessimism; I think that the opposite can also be the case. It’s true that doing business in the UK and Europe will irreversibly change, but where there is uncertainty there are also exciting possibilities.  Although it’s not going to be easy, I think the tech industry is well-placed to emerge from this period stronger, smarter and more flexible.