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Watch which way the wind blows

Microscope contributor
The channel is hoping the uncertainty generated by the general election will be short-lived and is planning for every eventuality, writes Amro Gebreel

With the day of decision in the general election just a matter of days away, the question of what it might mean for the channel is one that is worth considering.

Throughout the campaign there has been a great deal of talk about the economy and the need to support the recovery but the channel is hoping that there will be other changes following 6 May.

Ben Abraham, divisional manager of services at Bell Micro, tells MicroScope that it is already braced for cuts in public sector spending.

"From the perspective of the public sector, there are cuts expected to public expenditure although these are likely to be far deeper if the Conservative party gets into power. 

"This will have a knock-on effect to investment in a variety of IT projects within the public sector. A prime example is that it is expected that the Conservative party will scrap the National Programme for IT - NHS," he says.

"What Bell Micro expects to see here is a transition of IT expenditure from capital intensive programmes to focusing on extending the lifecycle of IT services and equipment which brings more opportunity for consultancy and support service extensions," he adds.

In response to that situation, the channel player is already calling customers and resellers to encourage them to extend services contracts. 

"Irrespective of which party gets into power, the channel needs to take a more long-term view of relationships with its end-users and build a better understanding of their client's estate so that it can advise them on ways to reduce the overall cost of IT without having a negative impact on IT service quality," he says.

One of the benefits that an end in electioneering will deliver, regardless of the winner, is a full stop to the current uncertainty of the future direction of politics. "The general election always introduces an element of uncertainty to the market and in the past many decision makers have delayed major ICT projects and purchasing decisions until they understand the full political outlook," says Andy Hollingworth, director of wholesale at Opal.

But, of course, a hung parliament, which has emerged as a serious possibility, would continue to harm spending.

"A hung parliament will almost certainly delay capex decisions but this could present opportunities for the channel as hosted solutions requiring negligible capex investment will come to the forefront," he says.

"Post election this time around, there will still be some more challenges to overcome for the successful party. With a record national debt to pay off, any new government will be looking to cut costs - either through spending cuts or tax increases. Again, for the channel this may well create opportunities as businesses look to review their ICT portfolio to cut their own costs and improve productivity," he adds.

No overall majority
The words 'hung parliament' also raise concerns for Neil Robertson, CEO of Compleat Software. "The fear of a hung parliament represents the worst possible outcome of on-going uncertainty. The result is a growing number of delays on purchasing decisions as companies look to retain cash until the future direction is clarified. Whichever way the election goes, we need it to happen as soon as possible and have a clear majority," he says.
 
"One thing is clear, we can expect an increase in unemployment and significant reductions in spend across the public sector that will impact all businesses that service them, it is just a matter of when it happens.

"UK plc has some way to go before real recovery is seen and every business will need to remain vigilant in managing their cash for some time to come," he adds.
 
Which ever party gets into power one of the other challenges along with the debt is preparing the country for the future in terms of delivering a solid IT infrastructure.

David Ellis, director of e-security, professional services and training at ComputerLinks, wants to see a commitment from who ever gets into power to improve the infrastructure.

"Both major parties have plans to build technology infrastructures over the coming years; a key one for the Labour party is the Digital Britain initiative which encompasses areas such as giving universal access to broadband, providing funds to invest in next generation broadband, requiring digital radio upgrades right through to rolling out regulatory attacks on digital piracy. These are due to be delivered over the coming years," Ellis says.

"From a Conservative perspective, they have pledged to give Britain the fastest broadband network in Europe with speeds of 100 mbps to most homes by 2017," he adds.

One of the hopes of those watching the election has been to see a debate about technology between the main parties that tackles some of the main issues that are impacting the channel.

"Intel welcomes the debate between the political parties competing to demonstrate their tech credentials," says Tristan Wilkinson, director for public sector in the UK for Intel EMEA, and a member of the Digital Inclusion. 

"We need serious policies that enable innovation to flourish and thrive; we must focus on fast action in order to avoid being overtaken by other nations. Let's not allow the dividing line being drawn between the parties become a digital one." 

In some ways, the amount of money that needs to be spent and the depth of the debt hole means that whoever wins will have a struggle on their hands to balance the books and meet manifesto promises.

"All political parties are in a win-win situation. If they win, they win. If they lose, they win by not having to clear up the current economic mess. UK business, however, is in a lose-lose situation, although the IT channel should fare better than most. 

"A further £13bn still needs to be spent on sorting out the NHS IT system - and the non-IT industries will just have to stump that up," says Dr John Yardley, managing director at workflow software distributor JPY.

Impact on resellers
But the overarching theme throughout the channel is that public sector cuts are coming and that will have a direct impact on resellers.

"Any new government may choose to reduce government spending so that our partners who are focused on that sector of our joint business may feel some chill wind there and that's been a very strong part of the UK channel business for many vendors for the last few years. Any change of government that is not clear-cut may affect overall business confidence," says Jill Henry, head of channels and alliances for McAfee UK and Ireland.

Political pundits talk about rule books being torn up as the televised debates create new front-runners for a day or two and some in the industry share a feeling that this time post-6 May things will be different.

Among them is Kevin Bland, partner sales director, UK and Ireland at Citrix, who talks of the election marking an inflection point. 

"The imminent general election will mark a new inflection point for many organisations - to address and change the way they approach business and the solutions they adopt and use. We saw this 12 months ago as the financial environment changed, and now again the channel has to respond," Bland says.

"Agility is absolutely paramount. With budgets, legislation and regulation all set to change, no matter what the political outcome, the IT industry faces a new period of uncertainty. Proactive channel players looking to tackle this should be seeking innovative, flexible platforms upon which to base their solutions for customers. For example, provide new service-based ways to buy IT solutions while endeavouring to future-proof as much as possible," he adds. 

As the finishing line comes closer the thoughts of the channel will turn to what happens next and, as these few views of the impact of the election illustrate, there are not just challenges to be overcome in the short-term but there must also be a commitment to investing in the infrastructure required to keep the UK plc running effectively in the future.

Whoever runs the country after 6 May they face a large number of challenges and the channel will be keeping a close eye to see which way the political wind blows to ensure they react accordingly to come out the other side prepared for the future. 

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