Startups: How to Shrink Your IT Budget


Small businesses are continuing to spend more and more on IT. In the second half of 2012, the average IT spend for small businesses was $162,000, and in the first half of 2013, that number jumped to $192,000. That’s a 19% increase over an incredibly short time period.

The largest portion of IT expenditures, 39%, comes from hardware. Software comes in as the next highest expense at 30% of the total IT budget. IT services accounts for 19% while cloud services takes 12% of the budget.

What You Can Do to Cut IT Costs

Fortunately, there are a number of things you can do to make your IT budget stretch further. Here are a few:

Using virtualization—You can significantly cut your hardware costs by condensing server usage from multiple servers onto one physical server using virtualization. This is possible because virtualized servers allow for different environments to run on the same physical server. The cost savings extends beyond hardware as it also requires less space and energy to operate your system…


  1. Well, the takes on this post are spot-on. I agree with the recommendations because each of them makes a lot sense in helping to cut budget cost on start-ups.

    However, I will suggest that companies seek a balancing factor since it has become obvious that taking steps to cut down IT costs would require huge upfront investment that could be scary.

  2. For me if you are a computer literate, the IT budget will be lessened. No need to hire someone to do the job that is easy to do. But let’s just face it, not all are computer savvy, some are still learning and it is not easy to familiarize a certain software.

    Upgrading your hardware got me glued. I concur with this. Mice share. Simple but really insightful.

  3. I’m sure businesses would love to read tips on how to cut costs and stretch their allocated budget for IT because, well, everyone’s having a crisis except for the really huge companies.

    I agree about upgrading the hardware(including the software) because it’s definitely less costly than buying an entirely new one. Automating systems is also an effective way to cut the costs.

    Nice help!