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Microsoft fears Brexit will disrupt 'frictionless' data flows and cloud services

Tom Belger
Finance and policy reporter
Microsoft UK CEO Cindy Rose speaks at the annual CBI conference in London. Photo: REUTERS/Simon Dawson

Microsoft UK’s chief executive fears a Brexit could disrupt “frictionless” flows of data across borders, creating problems for its cloud computing services.

Cindy Rose said her company (MSFT) had been “very vocal” in highlighting its concerns to the UK government as Britain has moved closer to Brexit.

Speaking in a debate during the Confederation of British Industry (CBI) annual conference in London on Monday, she said the company’s main demands were “clarity and certainty.”

Rose said: “We run cloud computing services. The cloud really works when data can flow in a frictionless way. Anything that disrupts that would be a problem not just for us, but for our customer as well.”

Concerns about new EU barriers to data flows if Britain diverges from its rules, and the impact on the UK tech sector, have featured relatively little in the public debate over Brexit.

READ MORE: Investors shun UK tech startups amid fears Britain ‘closing itself off’

The fears echo concerns over similar potential disruption to frictionless trade in goods, which have sparked far wider discussion despite making up a much smaller part of the economy than the dominant services sector.

But any disruption to data flows will depend heavily on how close a long-term relationship the next UK government can agree with the EU after Brexit.

Rose also highlighted her company’s worries over how new restrictions on immigration after Brexit could hit recruitment and retention, issues which have sparked wider alarm from business leaders across the UK.

“It’s about bringing in talent from outside the UK. We already have lot of talent-we’re concerned about their right to remain here,” she said.

“They’ve got lives and careers that that shouldn’t be disrupted. We need to be open to talent from wherever it is in a post-Brexit world.”

READ MORE: UK business leaders dismayed by choice between Corbyn and Johnson

A spokesman for Britain’s tech industry warned MPs earlier this year that Brexit was already causing “reputational damage” to both recruitment and global investment at UK tech startups.

Giles Derrington, head of Brexit policy at the techUK trade body, told a select committee in June: “Lots of people who work in tech are very internationally minded. What we are seeing, rightly or wrongly, is the reputation that the UK is somehow closing itself off from the rest of the world.”

He also said global firms and investors were increasingly considering backing startups in other countries, aware they could face different data protection rules and financial regulation in the UK to the rest of the EU.