Britain won't officially exit the EU until Article 50 of the Lisbon Treaty is triggered, but judging by new Prime Minister Teresa May's statements the die is cast and Brexit means Brexit. So what are the implications for the ICT channel?
The Brexit viewpoints are still pouring into our inbox thick and fast and while comments remain polarised, there is a developing optimistic trend. From an investment perspective, Knight Corporate Finance partner Adam Zoldan (pictured) believes it's important to play the long game. "There is a potential risk that M&A will be put on hold," he commented. "But given our focus is on a sector that has high levels of recurring revenues, long-term growth opportunities and has shown resilience to recession, we are quite relaxed. We have not seen any change in direction on the deals we're currently working on, and expect some interesting deal announcements over the next few months that demonstrate continued investment in our sector.
"There will clearly be a short-term negative impact, as we have already seen, due to the shock vote which most people were not expecting. This will result in some investment decisions being put on hold until there is more clarity around the way forward in terms of our relationship with the EU and its members. As long as any new agreement between the UK and EU members is reasonable for all parties, longer-term this decision could be a positive."
Nigel Cook, partner at TMT M&A specialist Evolution Capital, observed: "Investment decisions will be delayed and therefore we should be prepared for a slowdown. Price and therefore multiples are big factors for investors, buyers and sellers. In the mid-market where debt is the main source of capital, reduced lending multiples may have an impact on company values. Uncertainty can be more damaging to business than reduced performance and I am pleased we are now hearing a positive vision of the future for UK business from the new Cabinet and the role we will play in the global economy."
Stuart Griffiths, Managing Director at Dartford-based reseller True Telecom, is more pessimistic about the overall economy, but believes any recession that does materialise will be good for telecoms business. "In short, Brexit will of course damage our economy," he commented. "With the pound weakening to its lowest value in over 30 years, I imagine it will make the last recession look like a stroll in the park. At True, however, we feel we can turn a potential negative Brexit situation into a positive outcome. Our offering puts us in a position to help SMEs reduce their telecoms outgoings and cope with the unrest and turmoil a potential recession could cause."
Dave Dadds, Managing Director at channel-only Cloud Communications business VanillaIP, goes further, believing Brexit will have a 'very positive' effect on the general UK economy and his company's growth prospects, although he is concerned about skill shortages in the future. "In the medium to long-term, Brexit will be good for our economy," noted Dadds. "The ability to manage our own affairs directly and trade with all of the world's markets on an equal footing is important. We expect it to have a positive effect on UK VanillaIP business and our international Uboss brand, although it is important for the UK to continue to pull in migrant labour from all parts of the world on equal terms depending upon skills required."
Former Shoretel marketing chief Tom Perry, who now runs his own ITC marketing company Sherpa, is equally bullish. "My firm belief is that the channel has a golden opportunity following our Brexit decision to further develop and grow on a global scale," he enthused. "As the barriers to working internationally diminish we have seen the rise of the 'super VAR', and with huge political and economic change comes opportunity.
"When we exit, those companies that can think and act globally will have a fairer marketplace within which to operate and for some this will be enough to drive significant growth. For channel entrepreneurs there is a golden time just round the corner and for those companies like my own who help global technology companies expand, we just got a whole lot more to aim at."
The last word falls to Andrew Cooper, NEC Enterprise Sales Director UK&I, who urged the Government to act fully on the democratic decision taken. "The British people have spoken," he commented. "We have a moral obligation to respect their decision and to deliver the reforms required to ensure Britain remains a thriving and prosperous country. 'We're open for business' should now resonate from all sides of the political spectrum."•