Now That a Brexit Deal is Done, What's Next for the UK Channel?

By Geoff Shepstone

Geoff Shepstone

It’s been several months since a Brexit deal was reached and nothing devastating has occurred within the IT channel, the way some predicted. Yet that doesn’t mean companies shouldn’t be prepared for changes to come.

The primary impact of Brexit, over the past four years, has been FUD (Fear, Uncertainty and Doubt). Currency, billing and data security concerns drove this situation, as did talk of runaway shipment delays and potential price increases. Now that transition terms have been agreed upon, however, it seems these worries were largely unfounded. It’s time for organizations to feel more confident moving forward with planned projects.

There are structural reasons for channel partners to be optimistic. Regulations regarding cross-border data transfers may yet develop, but given the prevalence of cloud technologies, those regulations should not significantly alter infrastructure decisions. Even when hardware is involved, such as with SD-WAN installs, most equipment can be sourced and delivered in-region, reducing the impact of any new tariffs that are imposed. Let’s take a look at the real impacts of Brexit on the U.K. channel:

Biggest Brexit Fears Will Be Unfounded

Many experts in the Brexit deliberations expected the outcome to resemble a Y2K situation. Those who were around at that time remember the dire predictions of stuck lorries, ships that couldn’t pass from port to port, closed borders, crashes in the electrical grid, and even food shortages. None of it came to pass.

Brexit had its own share of calamitous prophecies. Companies would migrate from the U.K. to Europe by the hundreds, the economy would screech to a halt and trade chaos would ensue. Something far less apocalyptic lies ahead. Vendors in each region have the resources to provide customers with all kinds of support, from export and logistics capabilities to invoicing in multiple currencies.

Master agencies have appeared ready to help U.K. and EU resellers, distributors and vendors through the transition. At TBI Inc. specifically, we have offices in both regions that can address local or regional concerns as well as allow us to pay commissions in British pounds, euros or U.S. dollars. Master agencies will need this duality to best support both U.K. and EU parties moving forward.

Managed Services and Enterprise Software Will Grow in UK Channel

U.K. customers, in many ways, should see benefits to Brexit as their country transitions away from the EU. Advanced enterprise software products will help in this regard by enabling new systems and processes. These products will help organizations deal with changing requirements, particularly during the Q2/Q3 time frame of 2021. They will be of help in improving supply chain activity; satisfying data privacy, security and residency rules; and ensuring business continuity.

Managed services may benefit the most from the post-Brexit era. Changes in the availability of talent, due to the complexities of work visas and the changing attitudes toward business travel, will impact many IT specialties. Coding, cloud computing, machine learning, software engineering, blockchain, cybersecurity and artificial intelligence (AI) will be better served through managed solutions. Difficulties in finding local specialists in fintech, health care and other segments will also increase the need for virtual alternatives.

COVID-19 Should Still Be the Primary Concern

Indications are that COVID-19 will change the nature of channel activity in 2021 in ways more lasting and consequential than …

… Brexit. Leading this view is the remote workforce produced by the pandemic, which will surely continue. As a permanent change for enterprises, it must be accommodated.

Demand for video conferencing and collaboration solutions will clearly increase as employees work more independently. Cloud-based solutions will expand, with 18% growth forecast in 2021; cloud hosting and specific multicloud environments have come to the forefront as the number of employees working offsite increases. Management of mobile devices and the data they produce is also important.

Unified communications spanning voice, contact center as a service, chatbots and AI are needed to help automate and speed workflows, as well as enhance productivity and human resource management. Most of all, there will be a greater emphasis on endpoints and security than ever before. Work from home (WFH) has produced a horrendous increase in phishing threats on remote workers, with a 73% rise in attacks during the pandemic’s first six months. Health care and finance are two sectors hit particularly hard. Endpoint detection and response (EDR) and mobile device management (MDM) platforms will be critical in mitigating these new risks.

Last year there was a run on laptops, routers, and other hardware necessary for WFH. This year should see a rise in supplementary technologies to further connect and enhance this infrastructure, i.e., network access solutions and augmented communications. Enterprises will require a holistic work ecosystem. The need for physical office space will diminish, but support for hybrid solutions will increase significantly.

Now that Brexit has been negotiated and the new economic relationship is unfolding, the channel should be able to breathe easier. The sky may not be totally blue, but it’s not falling, either. It’s time to stop fretting over what we’re exiting and deal with a more hopeful business future that, at long last, we’re beginning to enter.

Geoffrey Shepstone is the founder and president of Chicago-based TBI Inc., North America’s largest privately held master agent. He founded TBI in 1991 when he recognized the need for partners to connect with cutting-edge solutions from trusted providers. His experience in telecommunications began at MCI before moving into management with Alternative Channel Divisions of LCI International (acquired by Qwest). TBI remains at the forefront of the technology industry with over 140 best-in-class providers, specializing in cloud-based solutions, security and data, mobility, voice and managed services. He earned a bachelor’s in marketing from Iowa State University. You may follow him on LinkedIn or @TBImasteragent on Twitter.