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June 24, 2016updated 22 Sep 2016 2:08pm

UK tech industry giants’ first reactions to Brexit

How major tech and telecoms players have reacted quickly with statements to the UK’s exit from the EU - web scale giants have yet to comment.

By Vinod

BT: we’ll ensure our views are heard in negotiations

IBM ..We also encourage leaders throughout Europe to preserve cross-border data flows that drive growth and innovation, and that underpin the worldwide digital economy

Sage: no doubt that whatever the pace of an exit from the EU, it will change the way we do business.

Microsoft offered no comment saying ‘we have nothing to share’

Google, Amazon, Facebook, Apple, no comment as yet

PwC: it is almost inevitable that the UK will pass legislation to give effect to the GDPR

Deloitte: Businesses need to ensure they are set up to navigate the immediate risks and impacts of an exit

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Rackspace: we’ll work to understand impact on staff with non UK passports

SAP: hopes that all parties in the UK and in Europe can reach a positive exit settlement quickly, minimising the uncertainty

Salesforce: we plan to continue building on our presence in the U.K. and across Europe."

Cisco: The UK continues to be an important and significant market for Cisco

Institute of Directors: One thing the Government must do immediately is to guarantee the right to remain of EU citizens currently in the UK.

TechUK: Long to-do list

Tech London Advocates: Today’s result is not what the London tech sector wanted to see

How major tech and telecoms players have reacted quickly with statements to the UK’s exit from the EU – web scale giants have yet to comment.

BT
"It’s business as usual for BT. We remain committed to serving all our customers, and to our employees and operations in all of the 180 countries where we operate. We are also here to support our corporate customers as they develop their own plans in response to the Leave vote. We expect customers to continue to have access to our high-quality products and services. We’ll work closely with the British Government and EU during negotiations to ensure BT’s views are heard as our goal is to protect the interests of our customers, employees, shareholders and business."

IBM
"As the global business community considers the outcome of today’s vote, we call on the UK government to adopt a stance in forthcoming negotiations aimed at ensuring that the country’s economy remains successful, open, competitive and innovative. We also encourage leaders throughout Europe to preserve cross-border data flows that drive growth and innovation, and that underpin the worldwide digital economy."

"IBM has been part of the British economy for over a century and has helped shape our technological development. As the country moves forward, IBM will continue providing leading-edge technologies – from cognitive systems to cloud platforms – to help our clients remain globally competitive. We look forward to continuing to help the UK retain its position as a leader in the world’s digital economy."

HPE
"Our focus is on our clients, partners and employees and continuing business as usual. As a leader in the technology sector, we’re used to transformation and change and will work closely with all our stakeholders over the coming months as and when the terms of the exit become clear."

Deloitte
David Sproul, CEO, Deloitte UK

"The British public have spoken and made clear that they see the UK’s interests best-served by leaving the European Union. While the UK has opted for a future outside the EU, Britain remains a competitive, innovative and highly-skilled economy and an attractive place for business. However, as indicated by today’s market volatility we are likely to see a period of uncertainty. Businesses need to ensure they are set up to navigate the immediate risks and impacts of an exit, and have the processes and people in place to manage a period of upheaval.

"Against this backdrop of uncertainty, British businesses must continue to be proactive in finding ways to raise productivity and drive growth. The UK remains a world leader in R&D and a hub for innovation. This will help businesses capitalise on the opportunities and respond to the competitive threats created by the leave vote. They must also play an active role in setting a vision for a new, post-EU environment which is open, pro-growth and delivers prosperity and opportunity for all."

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Rackspace
"With the UK voting to leave the EU, Rackspace will be keeping a close eye on the ongoing discussions to assess the impact it will have on its business. During the two-year negotiation period, it’s business as usual – we’ll continue to serve our customers in the same way and provide the same great service as we always have.

As the picture for life outside of the EU becomes clearer, we’ll keep our customers updated on developments in the law that may impact our business model. Rackspace already meets and exceeds EU and UK cloud requirements, and intends to continue to do so. In particular, we’ll work with customers to ensure that their data is hosted in accordance with applicable laws to maintain compliance. We will provide full transparency on any changes we may make to our business model. From an internal perspective, we’ll also be working with the UK Department of Business, Immigration and Skills to understand the impact new trade agreements will have on employees with non-British passports."

 

SAP
"SAP fully respects the democratic decision of the UK voters. SAP hopes that all parties in the UK and in Europe can reach a positive exit settlement quickly, minimising the uncertainty to business, as the UK moves from valued member to valued partner of the European Union."

PwC
"Despite the leave vote, it is vitally important that the controllers and processors of personal data do not fall into the trap of thinking that the new EU General Data Protection Regulation (GDPR ) no longer matters to them. Compliance with the standards of EU data protection law will be a "red line" requirement for the UK’s continuing access to the single market.

"Therefore, it is almost inevitable that the UK will pass legislation to give effect to the GDPR. Failure to do so will not only lock out the UK from the single market, but it will effectively prevent any form of business with the EU where personal data is involved. That would be a disaster for multi nationals that operate in both the EU and the UK. It would also mean UK citizens would not enjoy privacy protections and civil liberties equivalent to those on the continent.

"Any organisation based in the UK that wants to engage with the EU, whether or not as part of the single market, needs to continue with their preparations for the GDPR. If the UK is still a part of the EU in May 2018, the new law will apply automatically, exposing non-compliant organisations to a risk of staggeringly high regulatory fines for non-compliance, as well as new forms of litigation risk."

Cisco
Phil Smith, Chief Executive, Cisco UK & Ireland

"We respect the democratic process, as well as the decision of the British people. The UK continues to be an important and significant market for Cisco. We are accustomed to adapting our business around the challenges that the macroeconomic environment often delivers and we remain focused on delivering and maintaining a stable environment for our employees, customers and partners."

 

Salesforce
"Salesforce remains committed to the success of our customers in the region and we plan to continue building on our presence in the U.K. and across Europe."

 

CBI
Carolyn Fairbairn, CBI Director-General

"The British people’s vote to leave the EU is a momentous turning point in our history. The country has spoken and it’s for us all to listen.

"Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.

"The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.

"The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions.

"The CBI will be consulting its members and business is committed to working with Government to shape the best possible conditions for future prosperity."

Gordon Innes, CEO London & Partners
"London will continue to be the successful business centre it is today. London is the best place in the world to do business, attracting record levels of inward investment and serving as leading destination for international companies looking to expand internationally. Our capital’s technology sector is the largest Europe and will remain a hotbed of talent, creativity, business and innovation."

 

Box
Box has offices across Europe. Following today’s decision for Britain to leave the European Union, we’ll continue to serve our customers from our regional offices and will continue to deliver technologies including Box Zones, which helps to meet our customers’ local and international requirements.

 

TIGA
Dr Richard Wilson, CEO

"The UK video games industry is a high technology sector that provides high skilled employment for over 30,000 people, including approximately 11,000 development staff and which contributes £1.1 billion to UK GDP. It is also export oriented, with at least 95 per cent of studios exporting. Following the referendum in favour of ‘Brexit’, it will be more vital than ever to strengthen (and avoid harming) those sectors where the UK has a comparative competitive advantage: for example, aerospace, defence, high-value manufacturing and engineering, high technology industries, higher education, low carbon technology and the creative industries, including the video games sector.

"For the video games industry, it is particularly important that policy makers ensure games companies have access to sufficient finance, benefit from Video Games Tax Relief and R&D Tax Relief, have clear and stable IP rights and can access highly skilled people from outside of the UK. Any new points based migration system must not be onerous or complicated, otherwise the industry’s growth could be held back."

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Institute of Directors
Simon Walker, Director General

"While this may not have been the result that the majority of our members wanted, Britain has voted to leave the EU, and it is now imperative that our political leaders manage the transition as smoothly as possible. The weeks and months ahead are going to be a nervy time for business leaders, so they have to know that the Government is focussed on maintaining stability while a new relationship with the EU is established.

"British businesses are resilient and, with their characteristic ingenuity, they will weather this storm. It is now beholden on politicians to negotiate a deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states. Even once we have left, the EU will continue to be our biggest trading partner, and the first destination for many companies when they start to export. One thing the Government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. Companies do not want to have to worry about losing valued staff."

 

Sage
Nick Goode, Executive Vice President, Product Management

In the 23 countries that Sage operates in, there are 72 million Small & Medium businesses. The Brexit news this morning affects all of them – exactly how, nobody yet knows.

Over 50% of all UK businesses pay their employees using Sage, and we take this responsibility incredibly seriously, and see ourselves as the Champion for Entrepreneurs. These Small & Medium Businesses create two thirds of all new jobs, powering the economy and creating growth and prosperity for us all. Throughout the run-up to the referendum, we called on both sides to give these heroes the facts, and we created debates with politicians and experts to help get the real questions answered. And today, as the implications of this historic vote unfold, our role serving these businesses continues. We want to reassure entrepreneurs that we will support them today, tomorrow and for whatever the future holds – because there’s no doubt that whatever the pace of an exit from the EU, it will change the way we do business.

For example, rules on reporting European Union VAT for any company in the UK trading with Europe will change. Anyone working in or visiting London knows how many European workers we have: the rules on recruitment are certain to be reviewed.
Here are some further examples of potential change ahead:

– Statistical Reporting (EC Sales List and Intrastat) is likely to change, with UK likely to be excluded from the reports, but separate UK – EU reports may be introduced even in the short term.

– VAT reporting burden likely to increase in the mid-term (2-6 years) whist a UK – EU trade agreement is reached. There may be different short term trading agreements between the UK and each EU country, which will require different data, in a different format, prepared and submitted via different channels and with different timing.

– Regarding free movement of staff, UK Employers of EU workers (and EU employers of UK workers) will need to be ready for short implementation windows once the inevitable new regulations are in place.

– Product Packaging and Labelling: the EU has reduced the compliance costs of product labelling. It’s unclear whether the UK will continue to follow existing standards – there may be pressure to adopt simpler regulations for UK businesses but this may lead to long term increased costs due to parallel regulations.

– In Accounting, additional disclosure may be required from stock markets or governments, with additional analysis of activity in UK separate from the rest of EU.

See what Tech London Advocates, Virtus Data Centres & Interxion think of Brexit on the next page

 

Tech London Advocates
Russ Shaw, founder

"Today’s result is not what the London tech sector wanted to see, but we will continue our efforts to build London tech and continue on our journey to make London a world-leading tech hub. Digital and tech entrepreneurship has really taken hold in London, and we will continue to nurture this in the coming months and years. During this week, which is also London Technology Week, Tech London Advocates has been focusing on the importance of diversity in tech, and after this result, the London tech sector will continue to celebrate and welcome talent from London, the UK, the European Union and from around the world."

 

Virtus Data Centres
Neil Cresswell, CEO

"As a UK citizen, it is obviously a surprise. From an industry point of view, I think the same fundamentals of our industry, the dramatic growth in data centres and the importance of data centres and the use of data centers around the world is the same as yesterday. That is not changed.

"All those things that are driving data centres growth do not suddenly stop, they carry on.

"From a London market perspective, London yesterday was a very attractive place for foreign and multinational companies to come and do business because of the density of the population in and around London, the South East, the tech market, the great pool of English speaking talent. That does not change.

"It is a surprising result, but the fundamentals for the colo industry and the data centre industry probably do not change that much."

 

IO
Nigel Stevens, UK MD

"The result of the EU referendum will have many implications for the data centre industry, however, what those are, remains to be seen…For now the implications of the result are unclear. It could even lead to refreshed legislation that supports the UK data centre industry’s growth. What we know for certain is that data centres represent the backbone of the UK’s burgeoning tech sector, and are vital to the resilience of public services and the competitiveness of the UK on a global stage.

Interxion
Lex Coors, Chief Data Centre Technology and Engineering Officer

"This is the answer to ignoring voices. The Netherlands voted against the Political EU state and we were ignored. The UK has been pushing back on this same topic for years without result. I have no idea what will happen and what the impact will be."

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NetSuite
Mark Woodhams, Managing Director, EMEA

"While some inward investment from both inside and outside the EU may change, the UK will remain a highly attractive place for investment thanks to the clusters of skills around the country – fintech, financial services and motor car manufacturing are obvious examples. The UK government will, in theory, have more direct control and flexibility over the investments it can make, and potentially more funds to do so in the medium term. Investment in technology will ensure that innovative startups and SMBs – who lie at the heart of the U.K. Economy – continue to thrive through this significant period of change."

 

Datacenter People
Peter Hannaford, Chairman

"The Brexit result will have a profound impact on the free movement of people around the EU. At this moment in time we have no idea what restrictions will come into force and when. This is a bad day for the industry."

DLA Piper
Mike Conradi, telecoms partner

"It may now be much more difficult for UK telecoms operators to do business and remain competitive in Europe. The European Union telecommunications regulatory regime set out to create a common set of principles across the continent. As a result, the UK’s own system is strongly affected by European law, although the UK regulator, OFCOM, is seen very much as the model for others to follow.

"Depending on the terms of exit which will now be negotiated, the result may provide the UK Government with the power to free up the telecommunications sector from any regulation with which it disagrees. An example being the new rules on ‘net neutrality’, which could apply significant constraints on EU telecoms businesses and their retail propositions.

"Consumers may be forced to bear the burden of Brexit as it’s unclear whether or not they will be entitled to benefit from the ‘Roaming Regulation’, which aims to reduce roaming charges across the continent. There is also uncertainty for consumers around the charges national operators will impose when making call outside of an individual’s domestic market. It may be that operators insist on price increases, making it much more expensive for some UK users to make calls to mobile numbers in certain countries."

 

KPMG UK
Tudor Aw, head of technology sector

"A poll of TechUK members prior to the EU referendum showed that some 70% were in favour of remain. Today’s result is therefore disappointing for the industry. That said, I remain optimistic and confident over the future of UK Tech.

"My view is that the core attributes that make the UK Tech sector so strong and attractive remain in place, including an amazing talent base that has a long track record of creativity such as Alan Turing’s first working computer to Tim Berners-Lee’s World Wide Web. Add to that the great infrastructure and facilities; first class universities, a stable legal system; appropriate fiscal incentives; and an ecosystem of advisors that support the needs of tech companies. Technology is a sector that will only increase in importance and works without borders, I therefore continue to see the UK Tech sector as one that will not only withstand the immediate challenges of the referendum result, but one that will continue to grow and thrive."

 

techUK’s Julian David talks about the uncertainties of the future on the next page.

techUK
Julian David, CEO

"Today the British public has decided that the UK should leave the European Union. This is not the outcome that the majority of techUK members were hoping for. It opens up many uncertainties about the future. However, the UK tech sector will play its part in helping the UK to prepare, adapt and thrive in a future outside the European Union.

"Today, just as it was yesterday, the UK remains a great place to start, locate and grow a tech business. It is full of talented, skilled and passionate people with the ideas and creativity to make great things happen. Its consumers are eager and enthusiastic early adopters of new technology. Its world class universities are powerful engines of science and innovation and its politicians and regulators have a strong record of supporting market-led investment. We must now harness these assets like never before and build a world-beating ecosystem for tech that continues the great British tradition of inventing the future.

"Today, at techUK we start work with our members to map out this new future. There will be a long to-do list with many policy and regulatory issues requiring urgent action. Tech companies will need to come together and speak with one voice to ensure their needs are understood and acted upon. To succeed, the UK tech sector needs great people, great infrastructure, world-class science and research, unfettered access to global markets, and a world-class smart and predictable regulatory environment. Without the benefits of EU membership, the UK needs to be at its very best to succeed. That remains our purpose. To make the UK the best place in the world for tech."

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And what the tech industry said before the poll:

Letter to The Times, published 20th June 2016

Brexit could stall the UK’s tech growth engine

Dear Sirs,

Tech companies are not starry eyed about the European Union, but repeated surveys of start-ups, SMEs, investors and corporates make it clear that the overwhelming majority would vote to stay in.

Why? Because we believe staying in the EU is the best choice for the UK economy. According to techUK members, most of whom are small businesses, being part of the EU makes it easier for them to trade and do business across Europe. It makes the UK more attractive to international investment and makes Britain more globally competitive. A decision to exit the EU would leave tech firms and their customers, facing significant and prolonged uncertainty and leave the UK side-lined on key decisions that will shape a digital market of 500 million consumers.

The UK’s tech sector is a global success. It is growing faster than the rest of the UK economy and creating new businesses and jobs across the country. EU membership has underpinned that success. A vote to leave would undermine it.

Kazuo Abe, MD, Hitachi Europe; Tobias Alpern, CEO, iPlato Healthcare; Justin Anderson, CEO, Flexeye Group; Sarah Atkinson, VP, Communications, CA Technologies; Michel van der Bel, UK CEO, Microsoft; Olly Benzecry, Chairman, Managing Director, UK & Ireland, Accenture; Susan Bowen, VP & General Manager EMEA, Cogeco Peer1; Victor Chavez, Chief Executive, Thales UK; Virginia Choy, CEO, PretaGov Ltd; Julian David, Chief Executive Officer, techUK; Nick Denning, CEO, Diegesis; Paul Green, Creative Director of Iotic Labs Ltd.; Nicola Hall, Managing Director, Ingenica Solutions; Simon Hansford, CEO, Skyscape; Andrew Hartshorn, Managing Director, Methods Advisory Limited; Andy Isherwood, Managing Director, UK and Ireland, Hewlett Packard Enterprise; Paul Kaye, Managing Director, Intelliqa; Michael Keegan, Senior Vice President, Head of EMEA Product Business and Chairman UK & Ireland, Fujitsu; Tom Mockridge, Chief Executive Officer, Virgin Media; Kim Nilsson, CEO, Pivigo; Carlos Oliveira, CEO & Founder, Shaping Cloud; Yoge Patel, CEO, Blue Bear System Research; Gavin Patterson, Chief Executive Officer, BT; Rupert Pearce, Chief Executive Officer, Inmarsat; James Rigby, Chief Executive Officer, SCC; Peter Rodgers, Chief Executive Officer, 1060 Research; Ben Roome, CEO, at800 ; Philip Sheldrake, Managing Partner, Euler Partners ; Francis Toye, CEO & Founder, Unilink; Elizabeth Vega, Chief Executive Officer, Informed Solutions; Cormac Watters, Managing Director, UK, SAP; Craig Wilson, Regional General Manager, CSC; Sarah Windrum, CEO, The Emerald Group; David Stokes, CEO, IBM UK

 

By Ambrose McNevin, Ellie Burns, James Nunns & Joao Lima

 

 

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