back to article Brexit killed any hopes of growth in global technology spending

IT vendors across the world can blame Nigel, Boris and other pro-Brexiteers for a reduction in the amount of money that will be splashed on tech in 2016, at least that’s where mages at Gartner have laid the blame. Customers are expected to cough $3.387 trillion on IT this calendar year, which if correct - and it's a big if - …

  1. Chris Miller

    Gartner forecasters are very like economists - famously defined as: "An expert, who will be able to tell you tomorrow why the prediction he made yesterday didn't come true today."

  2. JustNiz

    As the media consistently demonstrate, Its all to easy to blame everything/anything negative on Brexit in a sensationalist way, and totally without any consideration to what any other costs and predictions would have been as a result of staying in the EU.

    For example the statement: "Sterling has fallen 15 per cent down against the value of the US dollar since late June."

    True but divisively misleading, since the euro has also correspondingly fallen against the dollar in the same period. It clearly has little/nothing to do with Brexit but everything to do with a strengthening US economy leading to an increase in the value of the dollar.

    1. H in The Hague

      "True but divisively misleading, since the euro has also correspondingly fallen against the dollar in the same period."

      Don't think so. I just checked the historical exchange rates on https://beurs.fd.nl/rente-valuta/ (Dutch equivalent of the FT: used it because this bit is not behind a paywall - 'Valuta' on the right).

      If I read that graph correctly, in the period from just before the referendum to today the exchange rate varied between 1.14 and 1.10 EUR to the USD. So a range of approx. 5% - I do think the GBP has fallen rather more against the USD in that period. (And the exchange rate varied from around 0.77 to 0.90 EUR to the GBP, a range of around 16%.) But I'm definitely not a financial wizard.

      Any commentards out there with access to better data?

      Though I do agree that some may use Brexit as a convenient excuse for pretty well anything.

    2. Lars Silver badge
      Thumb Down

      No, the euro has not also correspondingly fallen against the dollar in the same period. And I consider the whole Brexit a lose/lose situation as stupid as if Trump becomes the next POTUS. This should not prevent you from being an optimist, by any means, but please try to stick to facts.

  3. Anonymous Coward
    Go

    Its Brexit's fault!!

    I'm building a wheel of fortune for my desk. Whenever forecasts need to be revised I will be able to spin the wheel and randomly assign the fault between Brexit, El Nino, global warming, migrants and terrorists.

    Actually, I could use some more scapegoats if anyone has something to add to the list above. Maybe I should add a separate category for "terrorist migrants".

    1. Anonymous Coward
      Anonymous Coward

      Re: Its Brexit's fault!!

      Maybe you could add Trump winning in the US. I'm sure if he does it will be blamed on Brexit ans Russia.

      1. Anonymous Coward
        Holmes

        Re: Its Brexit's fault!!

        True, Vladimir Putin deserves a slot on the Wheel of Blame.

    2. Anonymous Coward
      Anonymous Coward

      Re: Its Brexit's fault!!

      Regulation

  4. Anonymous Coward
    Anonymous Coward

    Bollocks

    Is it me missing something or Gartner is talking out of their arse?

    Regardless of how flaccid BrExit will end up, both in-house IT and cloud providers will have to start ramping up plan-B/backup scenarios if they need to move facilities elsewhere. That means buying gear not by the palletload, but outright containerload. All of this will need to be deployed in parallel to existing facilities in the UK.

    So while BrExit and the related currency fluctuations may depress consumer spending, server and supporting infra spending should rise.

    1. P. Lee

      Re: Bollocks

      >Is it me missing something or Gartner is talking out of their arse?

      It's you missing something. Gartner are not in the predictions business, they are in the CEO-comforting business. They sell reports to comfort CEOs. If a CEO does badly, they can point to Gartner and say "it wasn't my fault - we are in line with expectations." if they do well, they can pat themselves on the back as having done an outstanding job in the face of adversity. Either way, Gartner gets a sale.

      I think its time to stop obsessing about "growth" anyway. If I made $1bn profit last year and $1bn this year, that's negative growth - recession - after inflation, but I'd still be pretty happy.

      If I have 100% growth, but its funded by someone else going into debt, that may not be great either. They might default. Even if I get my money, once they've defaulted they won't be buying lots of things. In global terms, its at best a zero-sum game when borrowing is up, but its probably a negative once you factor in the knock-on effects of lower tax, worse government-funded infrastructure etc. The only beneficiaries are those who can weather the downturn and pick up other people's assets when they go under. That will be those who aren't in debt. If you are piling up debt, that is negative productivity and your economy will reflect that. Blaming "the economy" for business performance is foolish. Expecting infinite growth is foolish and unnecessary. Corporate success and national success are rarely congruent.

      The bottom line is, your economics will reflect your business at a national level. If your currency drops, there is either far too much speculative money sloshing around (HFT is a prime example of "dumb things in the pursuit of profit") or your economy is actually weak. If your economy is weak you will earn less. The politically impossible way is to cut income numerically. The politically correct way is to allow inflation to reduce the value of the currency. Either way, you will be poorer because that is reality. If your economy is weak, take the hit with grace and fix it.

      If people curb their debt because things cost too much, that's a *good* thing. If we build and consume local goods, that's a *good* thing for the economy and the environment.

  5. Anonnymous Hero
    Coat

    Move to EU spend

    Surely if the Remainers have it right, companies will be fleeing the UK to move to the eu. Presumably they will need to relocated their datacentres to do so. That should result in plenty of IT spend.

    1. Hans 1
      Meh

      Re: Move to EU spend

      >That should result in plenty of IT spend.

      Not IT spend, transport spend, maybe a little bandwidth increase ... think, good bye present ...

      1. Anonymous Coward
        Anonymous Coward

        Re: Move to EU spend

        So they are going to turn off their entire Datacentre when they move it abroad? Sony did that when it was hacked; the PlayStation network was off for a month and cost them $171 million. Not all of this was due to the move but my point is you cannot just turn off hundreds of servers, ship it to another country and set it up without major disruption (i.e. lost revenue) to your company's business. You must have an intermediary to maintain uptime. You may need 20, 30, 40% of spare server capacity to make such a move depending on the services. Companies would need to buy equipment to do this. However, spending would get offset, so this year they spend more but next year they spend less because they already have loads of spare capacity (the opposite could also be true but economics is complex).

        1. Jess

          Re: So they are going to turn off their entire Datacentre

          I very much doubt that.

          They know that they can keep using existing data centres until April 2019. After a hard Brexit they would be likely to want 10 or 20% of the capacity for the British or UK operation.

          I would think there will be a point by which, if remaining in the EEA was not certain, they would start migrating to a data centre that was certain to stay in the EEA.

    2. Jess

      Re: Move to EU spend

      That is what I am counting on. EU HQs will downgrade to British offices. Hopefully they will need contractors to help them move.

      After that, I guess it's fruit picking.

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