Tag: Brexit

Brexit harms PC prices shock horror

are-we-afraid-noUK PC prices have suffered from the UK’s stand against foreigners coming over here and doing all the jobs we don’t want to do at reasonable rates.

Britain might be great again and have full employment, rule the waves etc since it stood up to Brussels, but Brexit has caused a spike in the price of various goods, ranging from computers to coffee and wine, with the channel having to pass on the bad news to customers.

According to Which? magazine,  the consumer watchdog asks questions about the impact of Brexit and details the range of price increases that have hit customers.

Apple MacBooks, which in some cases have increased by just shy of 20 percent, along with Microsoft Surface models that have gone up between 11-15 percent. But those are not the only two vendors that have been forced to increase retail prices. Ever since the referendum result slightly more than a year ago there have been movements in the prices of goods because of the slump in sterling.

Which? tech expert Jack Turner reckoned that some vendors had been quicker than others to pass the price rises on but exchange rates had caused a huge impact across the sector.

Nearly all of the major hardware vendors have been forced to bow to currency pressure and put up prices. So far since the Brexit vote the likes of HP, Dell, Lenovo along with Apple and Microsoft have raised hardware prices between 10-15 percent and software prices by 20 percent.

Context, which monitors the ASPs being offered through distribution, has seen rises over the course of the last year, which have continued into Q3.

Distributor ASPs for PCs were up 17 percent year-on-year across Western Europe, from €486 in July and August 2016 to €567 in early Q3 this year.

Currency fluctuations have been driving PC ASP increases since Q3 2016 but Context has also noted a move towards more high end gaming systems in the consumer segment, which has had an influence on prices.

Still at least the lot of the common man is better since Brexit… oh

Brexit turns UK into HPE’s backwater

1046922917HPE CEO Meg Whitman would rather have preferred that Brexit never happened.

Whatever some politicians might  talk about the benefits of leaving the EU, Whitman confirmed there had been a pause in demand in the UK market after the EU referendum.

“I think we are still feeling some after-effects from Brexit, because it’s not clear exactly how this is all going to work. So I would say, the UK market is a bit challenged for us”,  she said.

Public sector spending also being cut back “quite dramatically” and the UK has suddenly become one of HPE’s weaker markets.

Once it was a very important market, but now the rest of Western Europe, the US, Canada, Latin America and Asia were “all outperforming the UK right now”.

It looks like as far as HPE is concerned the UK, rather than growing more important as it asserted its independence from the EU is becoming an also ran behind such wonderful economies as Brazil, Venezuela and Burma. Maybe they should have put that on the Brexit campaign bus.

IT customs systems will fall apart like chocolate orange

terry's2-large_trans_NvBQzQNjv4Bq4cHFBfxHqfroyKoKkNhhsIOb6wYDoBFLKDEGDsm5ADgThe  new IT for the UK’s customs is so unready for Brexit it will fall apart like a chocolate orange, the National Audit Office has warned.

It has said that the Government’s post-Brexit IT system for customs is heading for a “horror show” that could risk £34 billion of public income.

In a scathing assessment, the National Audit Office said the computer system might not be ready by the time Britain leaves the EU, potentially plunging the UK’s ports into chaos.

The £157 million system is due to be completed just two months before Brexit in March 2019, but the NAO says delays common to new IT would cause massive disruption.

In unusually tough language, auditor general Sir Amyas Morse said ministers were only beginning to understand the momentous task of Brexit and that without further resources would find that “at the first tap, this falls apart like a chocolate orange”.

Publishing his report on the Customs Declaration Service, Sir Amyas said the IT system to record declarations on imports and exports threatened to become “a horror show”.

He said that the system is “well regarded”, but not considered flexible enough to cope with new rules after Brexit.

He went on: “At the moment it’s due to deliver just two months before the EU deadline … Our view in this report is that there is very little flexibility, should the programme overrun or unexpected problems occur. There are plenty of such problems that could occur.

“We’re not telling you this is a badly run project but, to be frank, looking at IT projects with still considerable technical challenges not yet resolved in them, we kind of know that it’s normal for there to be some drift in time.

“What’s unique about these circumstances is there can’t be a drift in timescale. Normally if you have this project and it took another six months to be a working project you’d say this is a pretty successful project. But this is not like that.”

Among risks outlined in the NAO’s report is the possibility that Britain’s final deal with the EU might require features in the IT system not yet anticipated by its designers – requiring last minute changes and causing more delays.

The Government wants to migrate from the old customs computer system starting in August 2018 and finish in January 2019. Under Article 50 the UK will leave the EU automatically just eight weeks later.

Brexit stuffs up PC sales

1046922917The UK’s self-inflicted Brexit crisis has caused PC shipments to drop 11.8 percent, according to IDC beancounters.

IDC has added up some numbers and divided by its shoe size to discover the EMEA PC market has continued to stabilise in the second quarter of 2017 with shipments only dropping 0.6 per cent year over year. However this did not apply to the UK which is more battered than a Mars bar in an Edinburgh chippie.

A total of 15.91 million units of desktops, notebooks and workstations were shipped in Q2, down from 16.01m in the same three months of 2016.

Brexit-related uncertainties meanwhile dragged PC shipments down by 11.8 percent in the UK, while German shipments also contracted, claims IDC.

Notebook shipments were the region’s star performer, growing 3.1 percent annually with a particularly strong 5.2 percent growth in central and eastern Europe (CEE).

Desktop shipments continued on a downward trajectory according to IDC, with shipments falling 8.3 percent year on year in EMEA. CEE again saw the highest year-on-year shipment increase at 7.8 percent.

Western Europe was however subject to soft declines of 2.1 percent annually having previously posted two quarters of growth. Desktop shipments fell by 7.8 per cent annually while notebook sales grew marginally, according to IDC.

The PC market in France, Spain and Portugal all performed above the market watcher’s expectations, seeing year-on-year growth of 1.9 percent, 11.6 percent and 16.7 percent respectively. Benelux also enjoyed a 5.8 percent annual increase in shipments.

“The traditional EMEA PC market continued to stabilize for another quarter, thanks to strong notebook results stemming from a faster adoption of mobility, in both the consumer and commercial spaces.

Malini Paul, senior research analyst of western European personal computing devices at IDC said:  “The return of the CEE region to positive growth for two consecutive quarters, contributed significantly to the overall better than expected results in the EMEA market.”

According to IDC, the CEE region’s strong performance in PC shipments is thanks to a thriving retail market and some large public sector deals in the region.

“In the CEE region, the PC market reported high growth in the desktop space, resulting in an increase of 7.6 percent after more than nine long quarters of market decline. This success can be attributed to promotions in retail, continual growth of gaming, and a few large deals that took place the public and corporate segments,” said Nikolina Jurisic, product manager at IDC.

IDC also claims that the consolidation among the top five PC vendors in EMEA is progressing, with HP growing its market share by one percent year over year, driven by solid notebook results and a desktop growth in the consumer space.

Lenovo also improved market share by 1.1 percent, and saw double-digit growth in commercial notebook shipments. Dell also saw marginal increases in market share for the quarter.

Save the Games industry

gamestop-inside-930x618TIGA, the network for games developers and digital publishers and the trade association representing the video games industry, today published its Brexit and Beyond: Priorities for the UK Video Games Industry report.

TIGA’s report sets out a policy agenda for Government, Parliament and policy makers to consider as the UK negotiates its departure from the European Union.

Dr Richard Wilson, TIGA CEO, said that TIGA’s Brexit and Beyond: Priorities for the UK Video Games Industry, sets out a cogent, coherent and constructive agenda for ensuring the UK games sector is a leading player in an industry that is predicted to be worth approximately $100 billion by 2018.

“If the UK creates a favourable tax environment with an enhanced Games Tax Relief, improves access to finance and enables studios to access talent, then the UK video games industry will both survive and thrive in a post-Brexit world.”

The UK video games industry already contributes £1.2 billion to UK GDP. This contribution will increase with the right policy environment in place.

TIGA’s Brexit: Priorities for the UK Video Games Industry, said that if the government wants to keep things working it needs to create a favourable tax environment to encourage businesses to invest in the UK.

The Government should consider increasing the rate of Video Games Tax Relief from 25 to 27.5 or 30 percent and introduce a Video Games Investment Fund to provide pound for pound match funding up to a maximum of £200,000 to enable more studios to grow.

It would also be a good idea to maintain the UK Games Fund so that start-ups can access funding for prototypes.

The report called on the government to increase the amount of money that a company can raise via SEIS investment from £150,000 to £200,000 and ensure that EU workers already working in the UK are protected so that they can continue to work in the UK with the confidence that they are not going to be asked to leave the UK in the future.

The government needs to and clarify the status of EU workers who enter the UK following the EU referendum and prior to the UK’s exit from the EU. T

Meanwhile the government needs to negotiate a trade deal with the EU that avoids quotas, tariffs and other barriers to trade to maintain free trade in video games, negotiate trade deals with growing economies, examine the potential for incentivising more businesses to export through the tax system.

The UK Government should consider introducing arrangements for the conversion or extension of a EU trademark or registered community design to cover the UK.

It also needs to adopt and adhere to the General Data Protection Regulation (GDPR) to ensure that companies based in the UK and doing business in the EU can continue to smoothly transfer information and data.

 

Mid-market positive despite Brexit

Divorce Just Ahead SignCloud and data centre player Node4 has issued a market report which shows that the mid-market is feeling rather optimistic despite Brexit.

The mid-market has long been one of the number one target areas for the channel and it is believed that budgets in that segment will rise this year.

Node4 said that while Brexit is a dark cloud which is causing some concerns with business leaders worried about the impact that the process to leave the EU will have on their prospects, most mid-market firms are optimistic.

More than 77 percent of mid-market firms are expecting budgets to rise this year with 22 percent of that total looking forward to more than a 10 percent increase.

Hosted and cloud-based services are scooping up most of the cash with IaaS and security as a service the two top areas. Managed services and disaster recovery as a service are expected to follow suit.

A third of those quizzed had Brexit concerns and many thought that the channel could be doing more to support them through potentially challenging times.

Paul Bryce, business development director at Node4 said that mid-tier companies were the UK economy’s engine and so it was promising that investment was taking place in the IT infrastructure that will help to fuel further growth.

“It is no surprise that mid-market companies are embracing the cloud, which affords a huge opportunity to drive efficiency, agility, scalability, and to empower workforces,” he said.

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.