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Brexit is hitting IT spending

Research confirms what many in the channel had already experienced with customers hitting the pause button on IT projects

Brexit is only 60 days away and there are signs that the ongoing lack of clarity around the terms on which the UK will leave the EU is having a negative impact on spending.

There have been anecdotal tales of customers reacting to the current political situation and some evidence of certain examples of areas like outsourcing being hit, but now some figures can now be added to those from ISP Beaming.

The internet firm carries out an annual survey of business leaders and was doing that during the week that the Primer Minister's deal to leave the EU was rejected by parliament.

The main concern for resellers is that the survey found that around half (53%) of SMEs in the UK and more than two thirds (77%) of larger enterprises have put at least one IT project on hold pending the outcome of Brexit. There has also been an impact at the SoHo end of the market with a third of micro businesses also pausing spending.

Despite the hype around digital transformation the survey found that technology companies were the most likely to have paused investments. Financial services, education and construction were others that had reacted with caution to what was happening with the Brexit process.

“Regardless of the rights and wrongs of Brexit, it has become clear that the political stalemate in Westminster is creating uncertainty and affecting investment," said Sonia Blizzard, managing director of Beaming.

"Whatever happens, businesses need to communicate and ensure systems are resilient, and we are seeing spending to improve essentials such as connectivity and cyber security," she added.

The reaction from some in the channel to the pause in IT infrastructure spending has been to use it as a moment to accelerate the push into managed services.

Steve Thompson, one of the co-founders of networking specialist LAN3, told MicroScope last week, that it was reacting to the current market conditions by coming up with something different to talk to customers about.

“Customers like that they can still maintain what they have already invested in, and we are going back to our 600 customers and selling them other services,” he said.

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