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How Brexit will impact cloud strategies

Potential skills shortage

Whichever way you voted on the 23rd June last year, there is no doubt that the ramifications of the UK’s Brexit from the European Union will continue to be debated until every T is crossed and every I is dotted, and beyond. While it is difficult to fully assess how deep reaching the impact will be felt regarding cross border trade and labour movement, I anticipate there will be a skills shortage in the short to medium term that an organisation will need to resolve.

The negotiations regarding tariffs, quotas and formalities to be imposed on labour movements post Brexit will be a source of headlines for months to come. For any organisations that currently outsources or contracts in a section of its workforce, solution development and support will be highly dependent on what comes out of those negotiations. Some organisations are no doubt already drawing up contingencies such as relocating or sourcing workers from outside of the EU, if they prove to be no longer available within our shores.

Up in the air

So much is still up in the air. The cloud itself cannot be affected by Brexit. However, hosting contracts and the cloud type (private, public or hybrid) might affect the overall cost to the organisation. Until they fully assess the effects of Brexit and customer demands, UK organisations shouldn’t be too hasty in moving their cloud hosting outside of the UK. Organisations should, though, fully assess the best possible solutions for their business and clients depending on the outcome, and be ready to implement strategies for each scenario once the assessment of Brexit is complete.

Whilst some observers believe cloud prices could increase on the back of Brexit, I don’t believe this will be the case. The UK has been a forerunner internationally in getting businesses cloud-ready. This has fuelled the growth of domestic competition, where several companies share a piece of the pie; this non-monopoly macro-economic market dynamic will keep price rises in check.

Cloud provision is big business in the UK and this is unlikely to change post-Brexit. Whilst it is hard to say at this point whether cloud providers will shut their businesses in the UK or not, I find that outcome highly unlikely.

Cloudy legislation

Data protection legislation in its current or post–Brexit format will and should be legislated to provide protection to consumers. Consumers are more concerned by data privacy than ever before. Because of this, I would encourage the Government to make detail of the negotiations on data privacy legislation fully available, so as a public debate on any such legislation can happen.

No matter the outcome of the Brexit negotiations, the implications of the impending General Data Protection Regulation (GDPR) for businesses are two-fold. Firstly, businesses will need to assess their current data collection and storage systems to make sure they are fully compliant ahead of the new regulations. Secondly, businesses will need to put in place new internal processes and update staff regarding how they access and share data. The financial penalties of failing to do so are significant, with businesses that fall foul of a data breach facing a fine of €20m or 4% of annual turnover (whichever is greater).

Keeping data at home

CIOs often still have the desire to keep their data close to home so that they can visit it if need be. Even before Brexit, many only want to do business with organisations who are going to provide the assurance that their data will never leave UK. This can easily be achieved for SMB and public sector organisations, but is difficult to achieve for truly global organisations with offices in multiple countries and highly mobile workforces. The correct strategy for where to keep data will differ from business to business and will highly depend upon how the data is used within the company.

Time to assess

Over the next 12 months, companies should comprehensively assess their current cloud provision. This will help them understand how their data is currently being stored, accessed and used. It will also ensure security compliance, disaster recovery plans and customer preferences can become better prioritised. This value proposal should be used as the starting point to assess different post-Brexit scenarios for when the effect of Brexit on cloud provision is made clearer.

Businesses of all sizes should also conduct an analysis on which skills are vital to keep their competitive edge and what kind of workforce is required to meet their strategic objectives in the medium to long term.

I would also recommend that businesses join or seek information from various industry groups and forums who are in position to influence and inform government during the Brexit negotiations to ensure that their needs can be better met.

Written by Dominik Birgelen, CEO, oneclick AG