Tag: Brexit

Channel fears more Brexit price rises

are-we-afraid-noThe UK channel fears more price rises after the UK government triggers Article 50 this month.

The UK is expected to go tell the EU it wants out later this month, if it can get approval from the House of Lords.

So far, lots of vendors have jacked up their prices but there are fears that more could be in store for the channel.

Each time there has been a major Brexit development the pound has received a kicking and some are getting prepared for more potential issues with prices.

HP, Dell, Lenovo, Apple and Microsoft have raised hardware prices between 10-15 percent and software prices by 20 percent, but it is likely that there will be more price hikes in the works,

The hard Brexit is coming when the dollar has seen considerable rises and since hardware components are traded in the US currency, this ultimately means price rises.

Many channel partners avoided passing too many price rises by managing stock but that could be impossible if further hikes come through the supply chain.

When Article 50 is triggered and the formal process starts, the channel is at the mercy of the overall economy which means price rises could be spectacular.

Many of the major vendors supplying from the USA face significant pressure for them to recover ground lost by exchange rate changes.

Amazon promises to create 5,000 UK jobs

amazonOnline retailer Amazon is set to create more than 5,000 jobs in Britain this year as the outfit boosts its UK operations.

Amazon, along with other tech giants such as Google and Apple, has increased its commitment to Britain in the last year, saying Britain’s referendum decision to leave the EU last June did not affect its investment plans.

The plans to add over 5,000 jobs in 2017 is a record for Amazon in Britain, although at least 2,000 of the jobs had been previously announced. The moves would take its permanent workforce in the country to 24,000.

Doug Gurr, UK country manager at Amazon, said the jobs would provide “even faster delivery, more selection and better value” for British customers.

Amazon’s new head office in London will have capacity for more than 5,000 people by the end of the year, the firm said. The concentration of tech expertise in London has been cited by many firms as an attraction.

 

Microsoft tells partners to pass on Surface price hikes

Microsoft campusSoftware king of the world, Microsoft, has told its channel chums to pass on the price increases of its surface gear.

The move is expected to cause a few headaches as resellers will be the ones left explaining why prices have risen.

The reason is the value of the pound and the Brexit tax. There have been some price rises already with the large hardware vendors passed on the currency fluctuations but now everyone is having to do it. This is mostly because the only thing that is selling for 90 euro cents a pound turns out to be the pound.

Vole has said that it is increasing hardware prices on the Surface and the Surface Book by 15 percent, as a direct consequence of the state of Sterling.

The vendor has given the channel some leeway on exactly how much it will pass on those increase, but really a 15 percent increase is about the only way it can happen.

A spokes Vole said that the price increases only affect products and services purchased by individuals, or organisations without volume licensing contracts and will be effective from February 15, 2017.

“For indirect sales where our products and services are sold through partners, final prices will continue to be determined by them,” it  added.

Microsoft is doing its best to encourage the channel to sell more of its Surface line. Schemes like a try-before-you-buy and increased services have all launched in the last few months to tempt more users.

Other vendors that have looked at prices include HP and Apple and earlier this week the speaker manufacturer Sonos revealed that it was also increasing the costs for customers because of exchange rates.

Still at least the UK can be re-assured that as soon as the UK gets out of the EU more than $380 million a week will be spent on the National Health Service.

Wobbly PC market stabilises in EMEA

Bike-blog--Young-child-on-010Figures just in from IDC show that the EMEA PC market stabilised in the fourth quarter.

After adding up some numbers and dividing by their shoe size, the IDC beancounters worked out that the market had declined only 0.2 percent annually, thanks to strong demand in the commercial space and a Chromebooks boom.

If it had not been for Brexit vote caused a slump in Blighty of 6.2 percent year on year everything in the region would have been good – another reason for suppliers to string up Nigel Farrage, Boris Johnson and Michael Grove.

“As the pound has become a turbulent currency following Brexit in the UK, the British traditional PC market was impacted negatively, down 6.2 percent,” said IDC.

In the final quarter of 2016, total PC shipments in EMEA reached 20.7 million, down 0.2 percent year on year. Notebooks performed well in the region, up 2.9 percent, and “strong demand” was triggered in the commercial space, which grew 10.1 percent.

During 2016, PC shipments fell 6.1 percent to 71.6 million units.

The biggest disappointment was that Windows 10 “did not drive extensive renewals.” The money spinners were Chromebooks which led to “strong demand for notebooks” in the second half of the year thanks to a boom in the education market.

Although the whole EMEA region performed well in Q4, the same could not be said for the UK.

Senior research analyst, IDC EMEA Personal Computing Malini Paul, said that the western European PC market performed better than expected in 2016’s Q4, thanks to notebooks in both the consumer and commercial segments.

“While promotions around Black Friday and the post-Christmas period supported the strong seasonality of the holiday period, fulfilling backlogs from 2016’s Q3 due to component shortages contributed to the sell-in uptake in the consumer space.”

Government stuffs up G-Cloud figures

Epic_FailThere was a sharp intake of breath as the government announced that its  G-Cloud sales figures had fallen by half and the feeling was that Brexit was to blame.

Now government has since admitted it stuffed up the numbers and there is nothing to worry about.

The figures were important because they show the success of a scheme which was supposed to give IT contracts to smaller suppliers rather than a single large supplier which might have a powerful lobby group.

The government publishes G-Cloud figures periodically, and the most recent data up to October, published before Christmas, shows that in that month, spending through the framework was just £38 million  – down 22 per cent annually, down 45 per cent on a monthly basis, and far below the average monthly spend on the framework for 2016 (January to October) of £59.7 million.

In fact the framework’s spending has not been this low since May 2015. However it is expected that the shortfall to be made up in the coming months as departments use their budgets before they expire.

The Cabinet Office confirmed that the data for October does not reflect any Brexit-related slowdown, but was in fact an administrative error. The correct data is expected to be uploaded shortly.

London could lose out as Euro tech hub

are-we-afraid-noLondon could lose its position as the leading destination for start-ups in Europe thanks to Brexit.

Tech investors moaned at the TechCrunch Disrupt London conference, that the government needed to answer shedloads of questions around immigration policy.

James Wise, partner at venture capital firm Balderton Capital, said that Britain employed 31 percent of all the people in Europe working in tech start-ups, and a significant number of them had moved to the country to start their businesses.

Government initiatives to support the tech sector were welcome Wise said, but the British government needed  to show more leadership and clarify the many questions hanging over the free movement of talent.

“The number one concern is still access to talent, and while the raft of announcements are all very welcome, very few of them deal with the ability to attract global talent to the UK to build companies here,” he told Reuters.

Reshma Sohoni, a partner with Seedcamp, which invests in  early stage companies, said funding for such companies had tightened considerably since the Brexit vote.

“We definitely see a narrowing of the kind of companies that can get series A or series B funding,” Sohoni said, referring to early rounds of venture funding that young companies need to grow. “Combining the uncertainty and the trouble getting visas, absolutely it (Brexit) is a problem,” she said at the event.

Matt Hancock, minister for the digital economy, said Britain needed “to be open and welcoming to the brightest and best from around the world” and not just the EU.

“Over the last few years, we’ve had freedom of movement within the European Union but outside we’ve had a fairly tight visa system, and we need to make sure we are clearly attracting and winning the global war for talent,” he told the assorted throngs.

“We’ve been doing this with visas for individual countries over the past few years, improving significantly for instance the visa system for China. Clearly we’ve got to get this right.”

Infosys cuts growth due to Brexit

infosysudacityIndia’s software services exporter Infosys slashed its fiscal-year revenue growth target for the second time in three months over fears that Brexit had hurt its bottom line.

While the outfit reported a 6.1 percent rise in second quarter net profit, Infosys said it now expected revenue to grow between eight percent and nine percent in constant currency terms in the fiscal year to March 31, 2017. Its previous revenue growth target, issued in July, was 10.5-12 percent, which it had already lowered from the 13.5 percent it expected in April.

The outfit depends on North America and Europe for the majority of its revenue. It is worried that hte impending US presidential election and the implications of Britain’s ‘Brexit’ move have caused many clients to delay or abandon outsourcing plans.

Infosys had warned in August it was seeing some “softness” in business after the June Brexit vote in Britain.

Chief Executive Vishal Sikka said in a statement on Friday the revision took into consideration “our performance in first half of the year and the near-term uncertain business outlook”.

The company is still not doing that badly and its reduced numbers are still ahead of analysts’ estimates. Still it is a little ironic that the outfit which is supposed to have been “coming over here and taking our jobs” is also suffering as a result of Brexit.

 

Brexit stuffed up HPE’s bottom line

logoFormer maker of expensive printer ink Hewlett Packard Enterprise has said that Brexit did have an impact on its bottom line.

The vendor said that there had been a slowdown in public sector spending following the referendum decision to exit the EU. HPE mentioned the slow down of public sector activity in its  latest results announcement but this was largely missed when HPE announced it was off-loading its software business in a spin merger with UK firm Micro Focus.

Speaking to analysts, HPE CEO Meg “Yahoo” Whitman said that Brexit was something that it had felt in its order books in the UK and across the continent.

“What we saw was actually a pause in purchasing in the UK. Certainly the UK public sector, but also the UK and then more broadly Europe which was, this was unexpected, a big change, let’s take a pause and decide what we want to do here. What I will say is that in the last couple of weeks we’re actually seeing orders pick up again,” she added.

But the result of Brexit and the shock to the UK economic system, particularly the value of the pound, has led to ongoing price scrutiny.

“We continue to also monitor the pricing, competitive pricing environment that we see and we adjust as necessary particularly in the channel. So the channel is where we serve SMB and that’s where our ability to sort of move the pricing in response to competition, we look at that actually every single week sometime multiple times a week,” added Whitman.

 

Brexit causes UK services sector to fall

boris-parachuteThe UK services sector contracted for the first time in three and a half years thanks to Brexit.

The PMI (Purchasing Managers’ Index) survey data from IHS Markit and CIPS shows that the output and new business both declined and at the fastest rates since early 2009, with the Business Activity Index falling from 47.4 in July, compared with 52.3 in June.

It meant employment in the services sector stayed the same, marking the end of a 3.5-year period of uninterrupted job creation.

The volume of incoming new business dropped for the first time since the end of 2012. The report said that this was the fastest decline since early 2009 and again fuelled by uncertainty over the EU vote.

Chris Williams, chief economist at Markit, said: “It is too early to say if the surveys will remain in such weak territory in the coming months, leaving substantial uncertainty over the extent of any potential downturn. However, the unprecedented month-on-month drop in the all-sector index has undoubtedly increased the chances of the UK sliding into at least a mild recession.

“Service providers are certainly bracing themselves for worse to come with a record drop in business confidence about the year ahead, leaving optimism at its lowest ebb since February 2009.”

Still at least Brexit means we will no longer having foreigners telling us how to run things, even if they appear to have been doing it better than us.

Amazon.co.uk sees no Britexit fall out yet

amazonsAmazon says that its British site has not seen any sales dip since the vote to leave the European Union, and in fact it is planning to create a further 1,000 jobs across the UK this year.

UK country manager Doug Gurr said that the site’s sales were in line with expectations and it was business as usual.

Gurr, who became Amazon’s UK head in May after a stint in China, said it was too early to say what the impact of the June 23 Brexit vote would be.

“There’s a lot of details to be worked out … We don’t know exactly what the regulatory environment will be, we don’t know exactly what the terms of the new separation will be,” he said.

A survey published last week showed confidence among British consumers fell sharply in the days after the referendum, while on Tuesday department store retailer John Lewis said its sales grew more slowly last week.

On Tuesday the boss of Sainsbury’s, Britain’s second largest supermarket group, said there was a danger of Britain talking itself into another recession.

Gurr said Amazon’s plans for the UK had not changed on the Brexit vote.

“We’re continuing with the plans, we haven’t suddenly invented new plans,” he said.

The additional jobs will take Amazon’s full time permanent employees in the UK to over 15,500 by the end of the year.

The status of EU nationals currently living in Britain has been clouded by the Brexit vote.

“What we’ve said to all of our teams is: ‘As far as we’re concerned nothing changes. We’re still part of the EU as of today, we’ll continue to operate on that basis,” said Gurr.

Dell jacks up Brexit prices

michael-dell-2UK suppliers are already having to pay the cost for the UK’s Brexit referendum result – Michael Dell is already jacking up his prices by eight percent.

Dell increased UK prices across its portfolio by eight or nine percent, according to its partners. He is not the only one.  Canalys warned that US vendors will begin hiking the prices of its products feared the UK IT market could shrink by as much as 15 percent next year.

Dell tends to hedge everything against the dollar on a quarterly basis. It was expected that he would do it in August but it was brought forward.

Fortunately, all the suppliers are in the same boat and no one is going to get an advantage out of this. However, it does makes sales teams look a bit stupid if they quoted a price one morning and are having to jack up the prices a few days later.

The worry is that clients will start looking at their budgets again and wonder about suspending projects until things have settled down a bit.

In a statement, Dell said:

“Dell’s priority is always to provide great value to our customers and partners. We carefully consider price moves for our customers and partners, and have worked diligently over the past several months to postpone any increases pending the outcome of the EU referendum. In line with the rest of the industry, our component costs are priced in US dollars, and unfortunately, the recent strengthening of the US dollar versus the euro and other currencies in the EMEA region, following the UK’s decision to leave the European Union, will have a direct impact on the price we sell to our EMEA customers and partners.

“We understand that this is an uncertain time for many British businesses and we will continue to work closely with our customers and partners to provide great value products and services,” a spokesDell said.

Dixon Carphone plays down Brexit worries

carphone-warehouseDixon Carphone attempted to play down the personal impact of market volatility that a post-Brexit vote will “inevitably” cause.

Dixon Carphone CEO Seb James talked bullishly about the business and its prospects but noted that things could get a bit edgy since Friday’s EU referendum.

“The nation has spoken and there has been a vote to exit the EU in due course. As you can imagine, we have been giving some thought to this,” he said.

“Our view is that, as the strongest player in our market and despite the volatility that is the inevitable consequence of such change, we expect to find opportunities for additional growth and further consolidate our position as the leader in the UK market,” said James.

Dixon Carphone said group sales edged up three per cent year-on-year to £9.78bn for the year ended 30 April. Sales in its UK heartland went up one per cent to £6.4bn, reflecting stores closure.

Demand for white box goods offset weaker trade in computing, TV sales benefited from the Rugby World Cup last year it said. The mobile element saw market share gains helped by the store within a store concept, the launch of a 4G network branded iD and lasting benefits of Phones4You going pop in the prior financial year, the company said.

Connected World Services jumped to £152m from £121m. Dixon has a deal to roll out CWS in Sprint stores across the pond.

Profit for the year was £337m, up from £285m in the prior financial year.

 

UK’s tech channel bewildered over Brexit

euThe UK’s tech channel is in a panic this morning as its managers try to get their head around Friday’s Brexit decision.

Gartner has forecast that Britain’s tech buyers will now stop spending in 2016 and 2017, turning earlier growth numbers negative and the industry will fall into recession. There is also a fear of the cost of hiring EU workers, taxes and tariffs which is enough to send the industry into a tail spin.

Still at least we won’t have those nasty foreigners telling us what to do, we can just sit around muttering there will always be an England as the French start turning off the power.

Most of the tech companies have said that they needed Brexit like a hole in the head and are wondering how they can recover their position.  Basically the issue is that global business value chains are more integrated, while Brexit envisages a market which was out of date 40 years ago with Britannia ruling the waves.

SAP has said that things might be alright if the country pulls finger quick and makes its escape as fast as possible.

However, outfits like Alfresco Software moan about the huge uncertainties which gets more than half its business from the EU.

 

 

Government likely to water down EU data regulations

ukflagNow that the UK has voted for Brexit the government is almost certain to water down the EU’s proposed tough data regulations to allow US companies to snoop on UK citizens.

The EU alarmed the US tech companies by drawing up rules, which would insist that European data stay in Europe. The US government wanted its companies operating in Europe to be able to hand over data with a court order. Essentially this meant that any Euro cloud data could end up in the hands of Uncle Sam.

While the Germans and French thing this is a bad idea, the British are less keen. Not only are they closer to the US intelligence communities, but they are also chummier with big US tech.

The General Data Protection Regulation (GDPR) was due to come into place by 2018 and have been should be a huge shake-up of EU data protection laws. It included tougher penalties for companies in breach of EU data protection law. The UK government had wanted to water down the legislation, but it was not sure if it could get the EU to agree.

With Brexit that has all gone by the wayside. With the UK is out, the government can ignore bringing the laws in completely and can push ahead with its own data sharing plans. These could give data to whoever it likes and spy on whoever it wants. From a supplier perspective it means it will be easier to house data in the UK, but UK customers might have to be happy to have their data snuffled by US spooks.

Suppliers could also be forced to hand over data to US courts, if the UK really does need to suck up to the US government.

Microsoft opposes Brexit

european-commissionMicrosoft’s UK boss has sent a letter to staff outlining why the firm believes the country is better off remaining in the EU.

This is expected as the IT community generally has backed the campaign to remain in the EU and even put their names to a letter published in a national newspaper.

But Michel Van der Bel, UK CEO of Microsoft did not join the throng, making many wonder if Vole really did hate Europe.  Now he has nailed his colours to the mast and penned a letter to the little Voles who work for him outlining his views and the reasoning behind it to make the case against Brexit.

Van der Bel stated that the vote was very much a question for individuals but, “as a business that is very committed to this country, our view is that the UK should remain in the EU”.

“We have a long history here. It’s where we opened our first international office in 1982 and we have been investing in the UK ever since. We have more that 5,000 highly qualified people working in fields including support, marketing, gaming, communications, cybersecurity and computer science research,” he added.

“Historically, the UK being part of the EU has been one of several important criteria that make it one of the most attractive places in Europe for the range of investments we have made. At key moments in our international growth we have specifically chosen to invest in our capabilities here in the UK,” stated the letter.

Microsoft recently invested in data centres in the UK to service the European market. This will be dicey if the Britain leaves the EU.