Right now, prices are going up everywhere — from the gas pump to the grocery store to the latest consumer and business tech and hardware. That’s just a part of life during a period of prolonged inflation.
And before you ask, no, we aren’t using this blog post to announce price hikes here at Blue Ridge Technology. But we do want to talk a little about how inflation and other factors (like continued tech innovation) are affecting what companies spend on IT.
If you’re not yet a Blue Ridge customer, right now is the perfect time to switch to us as your new IT partner. Costs are escalating all around you, so why not switch to a provider that will take the time to right-size your IT spend, finding areas where you can save and strategic areas where you can focus your spend?
Reach out today if you’re ready for that conversation. Otherwise, let’s talk about the overall spending trends for a minute.
IT Spend Will Reach New Highs This Year
New research show that global IT spend should reach a new high of $4.4 trillion USD this year. Yes, inflation plays a part in this increase, but it isn’t the whole story.
Businesses are continuing their digital transformation efforts and are gaining more and more value out of the cloud. Whether private cloud, public cloud, edge computing, or some mix of various strategies, the result is clear: performance is skyrocketing. Costs are rising at the same time.
Factors Going Into This Spending
So what’s behind this jump in spending? Several trends are coalescing right now, including these:
- New hardware: Businesses keep buying new hardware, both to continue the transition to a hybrid or remote workforce, or to make up for ongoing supply chain shortages.
- Software: More and more software solutions are rebranding as SaaS solutions, with recurring monthly or annual fees. These make your business more powerful, but the costs add up.
- Infrastructure: The servers and other network infrastructure businesses rely on don’t need to do exactly what they did five years ago. Hybrid work and cloud infrastructure have changed the landscape, sometimes requiring new spend on modern infrastructure components.
- Cloud: The cloud is absolutely revolutionizing how businesses get work done. But as the amount of computing power businesses need rises, so do cloud costs.
- Services: Businesses are relying on managed services providers (like us) for more and more of their IT needs, including cybersecurity, cloud management, and more. As managed services firms do more, they naturally charge more.
Are Spending Increases All Bad?
No, not at all.
Ultimately, spending more on IT isn’t a bad thing. As long as that increased spend results in increased performance and productivity, which itself results in increased revenue, then it’s good spend.
Increasing IT costs can become problematic, though. When the cost of doing business itself rises — without any tangible new benefits or capabilities — businesses can face an existential threat.
IT costs likely aren’t going to be the thing to push anyone over the edge. But overspending on the wrong stuff can certainly cause problems, especially for businesses with other cost pressures (and who doesn’t have new cost pressures right now?).
So as you enter your next season of budget planning or IT services contract negotiations, keep this in mind: are the cost increases driving real value? Or are they just driving up costs?
Blue Ridge Tech Can Help
If you’re frustrated by increasing costs that don’t seem like they’re providing any new value or capabilities, you’re right to be frustrated. And we can help.
When you switch to Blue Ridge Tech for your managed IT needs, we’ll perform a comprehensive analysis, determining where you can save and where you should spend — getting you the maximum value for your IT spend and empowering you to keep growing in whatever it is you do.
Ready to move to a better IT provider? Reach out today.