There is much uncertainty around how the new EU General Data Protection Regulation (GDPR) that comes into effect in May, 2018 will work alongside Brexit. Both UK and EU based companies must anticipate tremendous changes to policy and politics. Many questions are being put on the table for debate. Will GDPR be as easily enforceable in the UK after Brexit? Will the terms of leaving the EU have an impact on GDPR? On the whole, there is natural concern that the combined impact of Brexit and GDPR will put a strain on UK businesses. There is also the question of how the new regulations will apply to international companies setting up offices in the EU.
Gartner research indicates that Brexit will have a massive impact on how IT budgets will be spent in 2018. Organisations will want greater flexibility, and as such will be spending more on software and cloud-based services rather than making long-term, upfront investments. Brexit will accelerate the adoption of cloud-based services as companies prepare for an uncertain economic environment. Cloud Services have been proven to help control IT spend by moving IT CAPEX to OPEX, which will be increasingly important. In short, businesses will be more cautious with IT spend, and this will drive them towards cloud services.
In pursuit of greater flexibility and controlled IT spending in the pre-Brexit environment, companies will want to avoid lock-in with any one cloud provider. When choosing cloud providers, flexible pricing structures will be a high priority, as will the need to avoid paying for unused cloud capacity. Operating in a hybrid cloud model, with some workloads in an on-premises data centre configured in a private cloud and others deployed to the public cloud, offers many advantages.
The hybrid cloud model benefits organisations that have different workloads with different characteristics and requirements. For example, applications that have predictable capacity demands and regular, ongoing usage are often kept on-premises. Meanwhile, apps that have seasonal variability and can clearly benefit from highly scalable, on-demand capacity are deployed to the cloud. Having this hybrid cloud model will give companies the flexible, scalable options they need to adapt to uncertain business environments.
In addition, in the uncertain regulatory environment, companies will look for a cloud provider that can not only offer cloud services, but also support across the full lifecycle of a service from pre-sales to onboarding to ongoing management. Many organisations will need support from their cloud providers to navigate changing compliance requirements. Providers will need to outline crystal clear paths to cloud compliance and data privacy regulations, including on-demand security and compliance reports that give customers full visibility and control of their cloud environments and can help them pass data privacy and other compliance audits.
Brexit further complicates cloud compliance and data privacy concerns, as data privacy rules for the EU and the UK could change in the future. This makes it even more imperative that UK organisations remain up to date with data privacy and cloud security requirements. Larger companies often require a Model Contract Clause as part of their cloud agreements to ensure the liability of a breach is shared between the cloud provider and the customer.
Yet it is not only stormy skies ahead. Brexit will also create new opportunities for businesses by allowing for the emergence of new markets, new trade partners, evolving domestic demand, and so forth. As 2018 progresses, cloud services will help companies be agile enough to take advantage of these opportunities without exhausting their IT budgets. They will be able to quickly spin up new workloads, test new apps and add more IT capacity and scalability in the cloud.
Recent Forrester research tells us that cloud providers are continuously expanding their offerings in the European market, and that on-premises private cloud adoption in the UK has jumped from around a third in 2016 to more than 60% in 2017. Forrester speculates that this “sudden enthusiasm” for private cloud could illustrate how Brexit is prompting businesses to adopt cloud more quickly than they otherwise would, as they prepare for every possible Brexit outcome.
To avoid high upfront investments during this preparation period, businesses can take advantage of services such as Infrastructure-as-a-Service (IaaS) and Disaster-Recovery-as-a-Service (DRaaS). IaaS allows for the hosting of development, testing and production workloads in the cloud. It also allows businesses to scale up and down on demand and increase capacity without investing in on-premises IT infrastructure. DRaaS gives the option of replicating IT apps and data to the cloud for failover in the event of a disaster to ensure business continuity. In this way, businesses can avoid investing in a second data centre location for DR.