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For small businesses with limited financial resources, spending every technology dollar wisely is crucial. Recent research by Spiceworks comparing IT budgets across various company sizes highlights areas where SMBs can reduce costs without sacrificing performance or productivity.
Data shows that small businesses (under 100 employees) allocate a significant 24% of their IT budgets to hardware, compared to 16% by large enterprises. Small firms, especially, spend heavily on laptops, which account for over one-quarter (26%) of their hardware budgets. While having a modern, mobile-friendly laptop fleet is important, this level of spending may be excessive for some SMBs with less demanding computing needs. Large companies often achieve greater economies of scale on hardware purchases.
The Opportunity: Consider extending the refresh cycles for laptops and desktops by an extra year or two. Evaluate lower-cost devices like Chromebooks for basic tasks.
Data shows that small businesses (under 100 employees) allocate a significant 24% of their IT budgets to hardware, compared to 16% by large enterprises. Small firms, especially, spend heavily on laptops, which account for over one-quarter (26%) of their hardware budgets. While having a modern, mobile-friendly laptop fleet is important, this level of spending may be excessive for some SMBs with less demanding computing needs. Large companies often achieve greater economies of scale on hardware purchases.
The Opportunity: Audit telecom contracts and provider billing to identify potential savings on internet, phone lines, and WAN services that may be overprovisioned for your actual needs.
In facilities spending, small businesses allocate over one-quarter of their budgets to utilities (28%) and power/climate control (26%). In contrast, large enterprises spend only 14% and 16%, respectively, likely due to economies of scale.
The Opportunity: Reduce energy consumption by decommissioning unused servers, leveraging efficient cloud infrastructure, and optimizing lighting, cooling, and climate control systems.
SMBs spend considerably more on on-premises hardware and facilities costs but allocate significantly less (8%) to data center expenses like racks, cabling, and physical infrastructure. Shifting more workloads to public cloud platforms can reduce these expenditures.
The Opportunity: Accelerate the migration of applications, websites, development environments, and data stores to public clouds like AWS, Microsoft Azure, and Google Cloud. SMBs are already ahead of enterprises in leveraging cloud-based web hosting.
A final area of inefficient spending for SMBs is internal services. Only one-third (33%) of small businesses allocate any budget for activities like IT showback/chargeback, compared to 72% of enterprises. This may indicate a lack of emphasis on resource optimization.
The Opportunity: Implement processes and tools to increase cost transparency across IT resources and services. This can improve accountability and the right-sizing of investments.
'While every small business has unique needs, budget constraints make it imperative to continually evaluate whether technology spending aligns with priorities. The benchmarks provided can help identify potential areas of overspending compared to industry norms. Even small reductions can provide much-needed savings for reinvestment elsewhere.'
