A UPSL survey of the IT industry highlights concerns over Brexit and rising energy costs, but investment in London is still booming…
Conducted by Uninterruptible Power Supplies Limited (UPSL), the poll revealed that more than 35% of respondents believe political uncertainty is the biggest threat to their business in the coming 12 months.
It could be argued that the latest results reflect the perceived lack of clarity over Brexit, combined with the threat of increased US protectionism and a range of other global geopolitical factors facing the industry right now. Those concerns were supported by another question from the survey, which posed: “What impact do you think Brexit will have on your business?”
More than 60% of those questioned felt that Brexit will have a negative impact on their business, with over 50% fearing it will have ‘a small negative impact’ and more than 13% who worried it would have ‘a large negative impact’.
Conversely, just over 15% of those questioned felt that Brexit would have a positive impact on their business.
Rising costs (including energy costs) was a concern for about 32% of those polled, while, in third place, increasing regulatory burden was reported to be a challenge for 13% of respondents.
Other threats identified included increased competition from new and existing competitors.
Commenting on the results, UPSL sales and marketing director Tim Wilkes said: “When comparing the latest results to those from 2016, it is clear there’s been a significant shift in attitudes. Political uncertainty didn’t register as a top 10 response back then but that was before the Brexit vote and the impact that it’s had on the value of the pound.
“That rising costs is a close second is less surprising. In 2016, rising energy costs was the top response for over 77% of respondents, so it says a lot about how the UK’s IT and data centre business landscape has shifted in just two years.”
London market shows continued growth
While the results of UPSL’s survey highlight concerns regarding political uncertainty, a report by Equinix, one of the biggest operators of data centres globally has revealed that Brexit is not slowing investment in the sector in the UK.
The new report, which maps the astonishing growth of global data, reports that, despite Brexit, London is still the most important market in Europe with regards to data, even if Frankfurt is the fastest growing market in the world.
The Global Interconnection Index (GXI) measures interconnection bandwidth, or private data exchange between companies away from the public internet – by far the biggest means of data exchange. This form of data exchange will soon be 10 times as big as the internet, and is growing twice as fast.
“Despite Brexit and political uncertainty in the UK, the GXI reveals that London is projected to show strong growth, accounting for more than 35% of Europe’s Interconnection Bandwidth growth,” states Russell Poole, managing director UK at Equinix. “London’s digital acceleration shows that post-Brexit, interconnection bandwidth continues to be driven by the secular growth of global data traffic and the massive shift in IT to support this data explosion. Equinix’s 12 data centres across the UK and the recent expansion of Equinix’s LD4 data centre in Slough, is an example of the continued investment and growth in London’s digital sector.”
In a further independent survey of 130 senior UK IT decision makers, Equinix found that, despite Brexit, 64% of senior IT decision-makers believe that due to the flourishing data centre industry in the UK, the UK is the best place in Europe to interconnect with partners, customers, supply chain and Cloud service providers.
Frankfurt will grow faster than London, at 58% CAGR vs London’s 52%, but London is far larger – having twice the capacity of Frankfurt. More than half (51%) believe interconnection is key to their business’s survival – showing how critical London’s lead is to the UK’s post-Brexit competitiveness.