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  1. #1
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    [EN] Brexit: Microsoft warns UK it could build data centers in other EU countries

    Microsoft has hinted that it could be moving its data centre business elsewhere if a post-Brexit UK leaves market tariffs too high.

    João Marques Lima
    23 January, 2017

    Microsoft’s UK government affairs manager Owen Larter, said in a webinar that the company “is committed to the UK as it stands”, however, following Prime Minister Theresa May’s affirmation that the UK will leave the European single market, things could change for the technology giant.

    “We are really keen to avoid import tariffs on any hardware. Going back to the data centre, for example, we are looking to build out our data centres at a pretty strong lick in the UK, because the market is doing very well,” Larter said in the ‘What Brexit Means for Tech’ webinar.

    “[However,] 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 will build out our data centres across other European countries.”

    As a member of the European Union (EU), the UK and the other 27 member states do not have customs duties, and share common external tariffs with other countries.

    By leaving the EU, the UK would lose the access to such benefits. However, the government has not yet unveiled its plans on this matter.

    Microsoft currently runs three data centres in the UK in Cardiff, Durham and London, following an announcement by CEO Satya Nadella in November 2015.

    Enlisted in the data centres is the UK’s Ministry of Defence (MoD), which employs more than 250,000 people, as well as National Health Service trusts and organisations.

    In Europe, the web scale player also operates data centres in Ireland, France, Germany, the Netherlands, Austria and Finland.

    However, Larter also tipped that a ‘hard Brexit’ as it has been described by critics referring to the total exit from all EU platforms, will make it easier to move foreign developers and researchers in and out of the UK.

    He said: “One thing we are really pushing for is making it easier to bring people into the UK, particularly if they fit a particular profile, if it’s for work and they’re high skilled in a certain industry.

    “We have really struggled internally at Microsoft sometimes to bring people over from the US, from China, from India.

    “Even just on a month or by week basis, because the restrictions on immigration from outside the EU have been so severe, because we [the UK] could not control immigration from inside the EU and we were conscious about the numbers.

    “There is a complete review of the immigration system in the UK at the moment. In a way, it is an opportunity because we have an ability to completely reset things and create a 21st century migration system.”

    PM May has confirmed the UK will trigger Article 50 in March 2017 which will officially initiate the negotiations between the UK and the EU Commission which will determine the exit of the country from the union.

    She predicts that by March 2019, the UK will no longer be a member of the EU.

  2. #2
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Hardware Import Tariffs Could Change Microsoft Data Center Plans in UK

    Microsoft will consider halting its data center construction plans in the UK if Brexit results in import tariffs on hardware from China and Eastern Europe, a senior company official said.

    Yevgeniy Sverdlik
    January 23, 2017

    In a speech last week, British Prime Minister Theresa May said she would propose that the country exit the European Union’s single market as it exits the union itself. If that happens, the UK will have to renegotiate trade deals with countries outside of the EU (to replace EU’s trade deals), which could have huge implications for companies doing business in the UK.

    Today, a report emerged that UK officials would start trade negotiations with countries outside of the EU as soon as the formal process for exiting the union kicks off, which is expected to happen by the end of March. Those countries include China, US, New Zealand, and Australia.

    One of the most worry-some aspects of those negotiations for Microsoft (and likely other big users of IT equipment) is potential imposition of new import tariffs on data center hardware assembled in Asia and elsewhere around the world. A lot of the gear that goes into Microsoft data centers is produced in China and Eastern Europe; other hyperscale cloud platforms, such as Amazon, Google, and Facebook, also outsource hardware production to countries where it’s cheaper.

    Tariffs on hardware imports would substantially increase the cost of doing business for these companies, which every year spend billions of dollars on data center infrastructure.

    “We’re really keen to avoid import tariffs on any hardware,” Owen Larter, Microsoft’s UK government affairs manager, said last week in a Microsoft webinar on the implications of Brexit for the technology industry.

    “We’re looking to build out our data centers at a pretty strong lick in the UK, because the market is doing very well,” he said. “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.”

    Trump’s Trade Views Have Similar Implications for US

    The new US President Donald Trump’s promises of imposing new tariffs on foreign imports carries even bigger implications for hyperscale data center operators. The US continues to be the world’s largest cloud services market and the place where the bulk of their data center capacity is.

    Microsoft alone signed leases for more than 125 MW of new data center capacity in North America last year. Those facilities will need to be filled with servers.

    Trump’s transition team has floated a proposal to impose import tariffs as high as 10 percent.

    While a core Trump campaign issue, making imports more difficult – especially imports from China – is something pro-trade establishment Republicans oppose, so any effort to impose additional tariffs on international trade by the administration will not be an easy win.

    Cross-Border Data Flows Key to Cloud Growth

    Another big issue for Microsoft and other cloud providers is data flows. Today, a uniform set of rules governs cross-border data flows in the EU, meaning data from any EU country can be transferred and stored in any other EU country, because they’re all deemed to have equally adequate safeguards.

    Once the UK exits, its security measures may be reassessed as a country and if found subpar, transferring customer data from other countries in Europe to one of the two recently launched Microsoft data centers in the UK will not be as simple as pushing bits across the network, Larter warned.

    The UK is the EU’s largest cloud market, expected to double by 2019, he said. “That kind of bright future is probably not going to be possible if we make it a lot harder to transfer data and store data from the EU and into UK data centers.”

    Brexit would also mean the UK and the US would have to negotiate a new framework for transferring data between the two countries. Currently, cross-Atlantic data flows are governed by the Privacy Shield agreement between the US and the EU.

    Larter pointed out that Trump’s enthusiastic signals of support for business between the US and the UK would suggest a smooth path to a new data-flow agreement, however.

    The UK government has strong economic incentives to push for easy and seamless cross-border data flows. Nearly 80 percent of the country’s GDP is services-based; legal, advertising, financial services “are the engine of the UK economy,” Larter said, and they happen to be data-driven by their nature, so Microsoft will be pushing for international “data liberalization” to be at the heart of any future trade arrangements.

  3. #3
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Microsoft Backs Away from Manager’s Comment on Post-Brexit Data Center Plans

    Yevgeniy Sverdlik
    January 24, 2017

    Statements a senior Microsoft manager recently made about implications of potential post-Brexit hardware import tariffs for the company’s data center plans in the UK are not its official position, a Microsoft spokesperson said in a statement emailed to Data Center Knowledge.

    The company issued the statement after multiple online outlets published reports Monday on comments by Owen Larter, Microsoft’s UK government affairs manager, who said new tariffs on data center hardware imports from overseas could drive the company to revise its aggressive data center construction plans in the country.

    Larter was speaking about a hypothetical scenario and did not make any definitive statements about the company’s plans. Although the UK government is likely to negotiate new international trade deals as it leaves the European Union, no official negotiations have started

    The purpose of Microsoft’s official statement seems to be to stave off any concerns about the company’s planned investment in the UK:

    “The comments reported today by a Microsoft employee were not reflective of the company’s view. As we have said both before and after the EU referendum vote, Microsoft’s commitment to the UK is unchanged.”

    The webinar, in which Larter made the statements, has been removed from Channel 9, a website operated by a group of Microsoft technologists that hosts deep technical discussions on a range of Microsoft-related topics. The webinar’s title was What Brexit Means for Tech.

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