The UK’s collective decision to leave the European Union (EU) came as a surprise to most; even members of the ’Leave’ camp have expressed shock over the referendum results, many fully aware they were the bookies’ underdog all along.
Concerns raised by Remain voters include everything from national security to deportation, but it’s perhaps trade and the economy that have featured most heavily in discussion since that pivotal day. Britain’s business owners are understandably worried, and in few sectors are the concerns more justified than IT.
Some companies have had to hold fire on making any large financial decisions until it’s clear what impact leaving the EU is really going to have, including hiring new employees and updating IT equipment. It’s not all doom and gloom, however; as one leasing firm has discovered, there are a few upsides to this period of uncertainty.
Brexit for technology
Although impossible to know for certain, it’s fair to assume the UK’s tech industry was more supportive of remaining in the EU than it was of leaving. IT leaders were understandably concerned about how a new trade environment might treat what was one of the UK’s most burgeoning sectors – it was a fear shared by the country’s continental allies too.
The fretting was somewhat justified, with a number of industry experts still offering only hesitant outlooks on the future. "I think it's going to present a significant number of short-to-medium term challenges, and the outcome will be dependant of how we handle those," says billionaire tech entrepreneur Mike Lynch, who before the referendum said that a move away from the EU would be “lunacy.”
Damian Kimmelman, founder of London business intelligence (BI) firm DueDil, is even less optimistic: “The UK’s start-up scene, nurtured by international venture capital and skilled workers’ willingness to move here, was starting to create global challengers – and thousands of well-paid jobs,” he said in a recent Guardian interview. “Development will now stall as companies struggle to find the staff and cash they need to scale.”
A welcome, if surprising, boost
Some in the industry, like Google, are more optimistic, but for every positive comment it seems relatively easy to find two negative ones, from a variety of reputable sources. It might come as a surprise, therefore, to find that at least one business area has actually been boosted by Brexit.
All of the uncertainty in business owners’ minds – not just those in IT – has provided something of a lift for the computer leasing market. As the thought of Brexit makes it increasingly difficult for directors to plan ahead, they’re turning from buying to leasing in an attempt to bridge the gap.
It’s essential now more than ever that businesses are able to keep up with fast-evolving trends in technology, as Kate Little from Hertfordshire leasing firm Hardsoft explains: “Uncertainty makes it even more important to run your business as efficiently as possible - having the ability to take advantage of expansion opportunities is vital.”
By battening down the hatches and waiting for it all to blow over – an approach some will no doubt be considering - businesses risk being left behind. Imagine the scenario: five years pass, Article 50 has been triggered and everything begins to settle again, except your company is left with an office full of outdated equipment and a whole load of catching up to do. This is the situation that leasing can help firms avoid.
Buying hundreds of brand new computers, tablets and other much-needed equipment is a cost many companies just won’t be able to afford in this uncertain economic environment. Plus, the dramatic fall of the pound has caused many companies to push up the price of its products, making it even more financially difficult for businesses to purchase the technology they sorely need, with start-ups and small firms struggling the most.
Leasing, however, is not as dramatically affected by such economic changes and therefore allows businesses to stay up to date with the latest technology in the most cost-effective way. Not only are payments spread out over a specified period, lease payments are classed as a business expensive, and so can be claimed back in full.
There are other benefits too, including inclusive warranties and technical support – it’s no surprise that so many firms are choosing to lease rather than buy.
A shock to the system
Even the leasing industry was surprised by the referendum’s results. Hardsoft’s Andrew Morgan, for example, says his initial positive outlook was based on the assumption of a Remain vote: “We were looking forward to having more EU customers, and had no doubts that we were staying in the EU. The future was looking good for expansion.”
While things didn’t quite go to plan in that sense, he remains upbeat about the future, claiming interest in Hardsoft’s services has risen once again, following a sharp but short dent just after the votes were counted. Rather than cause more problems, the fact that the company operates across various European countries has actually helped business, he says: “The collapse of the value of Sterling against the Euro meant we could reduce our EU pricing, so business has turned the other way and sales are now up.”
With shifting interest rates also encouraging companies and governments to fund other projects, confidence in the sector continues to grow, even after many had feared the worst.
Watch this space
With Article 50 yet to be triggered, the UK remains part of the EU at present; there’s still time for outlooks to shift the coming years. No plans or details about what Brexit really means for businesses, so it’s likely that the nervousness surrounding the leaving process is going to remain for some time.
There’s never been a better time for leasing companies to shine, providing a much-needed service for a business world filled with uncertainty. It also gives the industry a little breathing room, and time to prepare for what may happen beyond the next couple of years.
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