BMI View: The Brexit referendum decision has changed the outlook for UK IT market spending in the
short term and throughout our forecast period to 2020. The most immediate impact is in the hardware
segment, where sterling depreciation will result in price increases for PCs and peripherals. The fast wave
of these increases was announced by vendors shortly after the referendum. The software and services
segments are expected to be more resilient in the short term, but have a greater degree of uncertainty
surrounding the medium-term outlook. The deterioration in London's position as a financial centre as a
result of EU-UK negotiations could have a significant detrimental impact.
Latest Updates & Industry Developments
? Computer Hardware Sales: GBP19.4bn in 2016 to GBP19.3bn in 2020, CAGR of -0.1% in local
currency terms. Price increases will result in a short-term hit to spending, before a gradual
recovery. However, the trajectory will remain subdued due to PC market saturation and a shift in
enterprise spending towards cloud solutions.
? Software Sales: GBP14.0bn in 2016 to GBP15.3bn in 2020, a CAGR of +2.2% in local currency terms.
The large financial services vertical is important to the market and, as such, curtailed investment and/or
moving jobs to other European financial centres is the major downside risk.
? IT Services Sales: GBP26.4bn in 2016 to GBP30.2bn in 2020, CAGR of +3.5% in local currency terms.
Weaker enterprise sentiment resulted in a downgrade, but there will still be major opportunities in the
cloud computing market and smart services, where technology trends will sustain strong growth even
amidst political and economic uncertainties.