UK’s decision to quit the European Union came as a surprise to even the Prime Minister. The country remains divided on the decision, with the repercussions still a mystery; businesses and corporations, however, need to be one step ahead to avoid any potential losses.
Microsoft is concerned about what Brexit might bring for its business in the UK; the company recently increased prices for its enterprise software and cloud services citing the fall in GBP’s value.
Today Microsoft UK’s government affairs manager Owen Larter delivered Microsoft’s concerns with Brexit; the loss of access to the European single market could lead the British government to impose new tariffs on imported computer hardware.
If this happens, Microsoft might reconsider its data center expansion plans in Britain, as Microsoft imports most of the equipment for these projects from China and Eastern Europe.
Larter’s comments are not as scary as they sound – they are merely a possibility to consider; he further highlights that Microsoft recently built three new data centers in the country, and says Microsoft is “committed to the UK as it stands.” He continues by claiming that the market is “doing very well” and Microsoft is “looking to build out [its] data centers at a pretty strong lick in the UK.”
However, that’s where the optimism ends. He continues his statements by mentioning that “if all of a sudden there are huge import [tariffs] on server racks from China or from Eastern Europe, where a lot of them are actually assembled, that might change our investment decisions and perhaps we build out our data centers across other European countries.”
The data centers Microsoft is talking about are primarily to power its Azure services for enterprise and government clients; the NHS and UK’s Ministry of Defence, for example, use these services.
Microsoft’s Azure ambitions, however, do not depend on the success of UK. Microsoft already has several data centers in Austria, Finland, France, Germany, Ireland, and the Netherlands – with expansion going strong there as well.
If the UK were to hinder Microsoft’s expansion plan growth; as the data centers in rest of Europe can serve Britain’s needs, Microsoft would mostly remain unaffected.