Brexit Vote Means Weaker UK And European Tech Market In 2016 And 2017

Andrew Bartels

As soon as the news of the Brexit vote in the UK came out, the Forrester team began revising our UK and European tech market forecast to take into account the economic implications and uncertainties of the voters’decision that the UK should leave the EU. Based on this revised analysis, we predict the UK tech market will grow by just 1% (pounds sterling) in 2016 with zero growth in 2017, compared with our prior forecast of 5% in both years.

Europe as a whole, will post no growth in 2016 (euros), and just 1% growth in 2017  two percentage points slower than our earlier forecast. With the plummeting pound and enervated euro, European tech market measured in US dollars will be similarly weak with 0.2% growth in 2016 and 1.1% in 2017.

The slowing of UK and European tech market growth results from multiple uncertainties created by the Brexit vote coming on top of what was already a weak and shaky European economy. As a result:

  • The UK economy, which had been outperforming most of the Eurozone countries, will take a hit. The Belgian, Dutch, French, German, Italian, and Swiss economies, which are growing by 1-1/2% or less, are vulnerable to declines, with Italy especially exposed due to a looming banking crisis.
  • Greece and Portugal are struggling once again, with threats of renewed recessions leading to declines in tech spending.
  • The only countries with decent economic growth and above average tech market growth are Ireland and Spain in the Eurozone, and Sweden, Poland, and other Central European countries outside it.
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After Brexit, it's business as usual for most of Europe's public cloud workloads

Paul Miller

The flags of the European Union and the United Kingdom

(source: Wikimedia Commons)

Two weeks on, the result of the UK referendum on membership of the European Union (EU) continues to reverberate around the world. Forrester provided advice for clients needing to understand the business implications. Looking at the specific impact on public cloud deployments in Europe introduces a number of additional points. These are best considered in three separate contexts:

  • that of companies wishing to serve customers in the UK
  • that of companies wishing to serve customers in the remaining 27 EU member states (the EU27)
  • that of companies wishing to serve customers in the EU27 from a base in the UK.
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Digital Transformation Forum Europe 2016: Q&A with Blake Cahill, Head of Digital, Royal Philips

Laura Koetzle

Forrester’s Digital Transformation Europe 2016 Forum in London starts today, and our first industry speaker will be Blake Cahill, Head of Digital, at Royal Philips. Over the past 20 years, Blake has led a series of marketing, creative, client management, product innovation, and thought leadership projects for both Fortune 500 organizations and digital start-ups. At Philips, Blake is helping to lead the Dutch company’s international rebranding and expansion into new technologies and markets. In his presentation, he will talk about the role of digital marketing in the transformation of Philips into a global digital business, and in entering the Chinese market, providing key best practices and lessons learnt.

As I prepared for my role as Forum co-chair, together with Benjamin Ensor, I spoke to Blake about his views on the age of the customer and the impact of digital on companies like Royal Philips. Here is what Blake shared with me, and I hope you will enjoy his answers as much as I did. If you would like to attend Blake's presentation in person, there is still time to register!

Q. How is digital transforming Philips' business and, as a digital marketer, how are you collaborating with and/or advising your peers in other parts of the business on the transformation?

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Digital Transformation Europe Forum 2016: Q&A With Fergus Boyd, VP, Digital And IT, Yotel

Laura Koetzle

This week, Forrester’s European Digital Transformation Europe Forum 2016 kicks off in London at the Lancaster on June 8-9. Myself and Forum co-host Benjamin Ensor are very excited about the program that we have been able to put together across the two days. Our list of industry speakers is impressive, and includes Blake Cahill, Global Head of Digital and Social Marketing, at Philips, Toby Wright, Chief Technology Officer, at Telegraph Media Group, Nina Jones, Global Owner Experience Director, at Jaguar Landrover, and Dr. Horst J. Kayser, Chief Strategy Officer, at Siemens AG.

On day one, we will also be hearing from Fergus Boyd, Vice President, Digital and IT at Yotel. Fergus is responsible for this start-up affordable luxury hotel brand’s digital strategy and services (web, mobile, social), IT innovation, and all back-end and guest-facing technology. He is a serial digital entrepreneur and technology transformation agent and led award-winning IT, eCommerce, and innovation initiatives at Virgin Atlantic and British Airways (BA).  

In the run-up to the Forum, we asked Fergus to answer a number of questions on how Yotel uses digital to differentiate itself in the hospitality and accommodation market. His answers are a must-read for other tech management and digital business leaders facing similar challenges. I look forward to hearing Fergus’ presentation, “From Raw Fish To Moving Beds,” this Wednesday. Come and join us by registering today!

Q. How does Yotel use digital (web, mobile, social) to differentiate itself as a startup hotel brand?

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Established Chinese cloud providers hope to succeed in Europe's public cloud market

Paul Miller

When we think about the public cloud, the list of credible providers can sometimes seem rather short.

(The Great Wall of China. Source: Paul Miller)

In North America, Europe, and elsewhere, the same few names tend to dominate. But not in China. There, big local brands continue to command impressive market share. And now they're looking to expand into new territories, including Europe.

Huawei hardware and Huawei's distribution of the OpenStack open source cloud platform power T-Systems' Open Telekom Cloud. This was launched, with some fanfare, at CeBIT in Hannover. 

Alibaba Cloud, which leads the Chinese public cloud market, is also coming to Europe this year.

In my latest report, I take a look at what both Alibaba and Huawei bring to Europe's public cloud market, and ask whether they can repeat their domestic success in this market.

TL;DR - it would be unwise to discount either of them.

Finovate 2016: Automation And Personalization Take Centre Stage

Benjamin Ensor

Finovate came to London again this week and I was lucky enough to attend. Here are my thoughts from the two days:

  • This year’s big theme was robo-advice. Every Finovate seems to have an unofficial, accidental theme with a large group of start-ups clustered around the same disruption, like PFM, mobile payments, small business banking or digital wallets. This year it was robo-advice.
  • Robo advice is starting to look crowded. Each of the new digital investment managers has a distinct story. Scalable Capital offers a sophisticated quantitative, value-at-risk strategy. MeetInvest helps investors mimic the strategies of famous investors like Benjamin Graham or Peter Lynch.* Investify lets investors choose themes that feel right. DriveWealth offers fractional share investing to allow low-cost access to the US markets. SwipeStox makes it easy to follow other investors through an app. Capitali.se converts ideas into trading rules. Europe has many countries and investors are diverse. Even so, the market is starting to seem crowded. Clearly the cost of managing investment portfolios is falling, which should enable firms to break even with fewer assets under management, but the costs of regulatory compliance and marketing to achieve growth have not diminished. Investment performance will sort the unicorns from the donkeys.
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Online Display And Social Media Advertising Will Account For Nearly A Quarter Of Total European Advertising Revenue By 2020

Samantha Merlivat
Combined, online display and social media advertising spend will double between 2015 and 2020, growing from €14.4 billion to €28.7 billion.
 
Among the factors driving growth, the combination of mobile and premium video advertising will drive an upsurge in demand for both online display and social advertising. Advertisers will increase their investments in video and mobile ads as media consumption evolves and targeting accuracy improves.
 
Native mobile video advertising is already proving a winning formula in the social media sphere, and publishers will take notice as they further refine their video ad offerings to provide more premium inventory, preventing a decline of video ad CPMs as supply increases. In fact, mobile ad spend will overtake PC as PC flatlines in the next five years.
 
Other developments will continue to disrupt online ad revenue in the next five years: 
  • Programmatic will become the default mechanism for trading online display
  • Ad blocking will force new behaviors on the publisher side, and a greater struggle to hit the sweet spot between monetization and consumer experience.
  • Growing rivalries between Apple, Facebook, and Google for news aggregation services will further dis-intermediate publisher mobile advertising revenue.
To find all the trends affecting online display and social media advertising in the next five years, read Forrester’s European Online Display and Social Media Advertising Forecast, 2015-2020.

Microsoft and T-Systems Find Innovative Solution To Address Customer Data Privacy Concerns

Paul Miller

The big public cloud providers, most of which are still from the United States, sometimes have a hard time finding ways to balance their legal obligations at home with the quite different sensitivities they encounter amongst their new international customers. For a long time, the toolkit has been pretty consistent: site data centres as close to the customer as possible, vehemently support political efforts to harmonize laws, and ocassionally be seen to stand up to the worst execesses of Government over-reach.

Photo of German and European flags in Berlin, from Flickr user Luigi Rosa
(Source: Flickr user Luigi Rosa. Image licensed under Creative Commons Attribution License)

Microsoft's announcements in Germany today appear, on the surface, to follow that model pretty closely. But there's a twist that's potentially very important as we move forward.

First, the standard bit. Microsoft, yesterday, announced new data centres will be operational in the UK next year, joining existing European facilities in Dublin and Amsterdam. Big competitor Amazon did much the same last week, announcing that a new UK data centre will be online in the UK by "2016 or 2017." Given the vague timescales, it might be easy to assume that Amazon was trying to steal a little of Microsoft's thunder with a half-baked pre-announcement. And then, today, Microsoft announced two new data centres in Germany. Amazon already has a facility there, of course.

So, why's this interesting? 

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Covering Cloud Computing From Europe For Forrester’s CIO Role

Paul Miller

Hello from the newest analyst serving Forrester Research’s CIO role. My name is Paul Miller, and I joined Forrester at the beginning of August. I am attached to Forrester’s London office, but it’s already clear that I’ll be working with clients across many time zones.

As my Analyst bio describes, my primary focus is on cloud computing, with a particular interest in the way that cloud-based approaches enable (or even require) organizations to embrace digital transformation of themselves and their customer relationships. Before joining Forrester, I spent six years as an independent analyst and consultant. My work spanned cloud computing and big data and I am sure that this broader portfolio of interests will continue into my Forrester research, particularly where I can explore the demonstrable value that these approaches bring to those who embrace them.

I am still working on the best way to capture and explain my research coverage, talking with many of my new colleagues, and learning about potential synergies between what they already do and what I could or should be doing. I know that the first document to appear with my name on it will be a CIO-friendly look at OpenStack, as the genesis of this new Brief lies in a report that I had to write as part of Forrester’s recruitment process. I have a long (long, long) list of further reports I am keen to get started on, and these should begin to appear online as upcoming titles in the very near future. I shall also be blogging here, and look forward to using this as a way to get shorter thoughts and perspectives online relatively quickly. I’ve been regularly blogging for work since early 2004, although too many of the blogs I used to write for are now only preserved in the vaults of Brewster Kahle’s wonderful Internet Archive.

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BT Transformation Q&A With Sharon Cooper, Chief Technology Officer, BMJ

Laura Koetzle

The age of the customer demands more of companies, forcing them to change how they develop, market, sell, and deliver products and services. In response, CIOs must invest in business technology (BT) — the technology, systems, and processes to win, serve, and retain customers. At Forrester’s Forum For Technology Leaders in Lisbon (June 2-3), leaders from firms like BMJ, Portugal Telecom, BBVA, Mastercard, Alliander, DER Touristik and UniCredit will share strategies that you can use to achieve Read more