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It is no surprise that IT costs are increasing with the value of new technologies being realized by more and more small companies. However, an increase of 19% to $192,000 on average for the first half of 2013 over the second half of 2012’s average IT Budget of $162,000 is a little alarming, especially as these significantly outpace revenue growth.
Where’s it all going
The biggest portion of IT spend for small businesses is in hardware, accounting for 39% of expenditures. Software is the next biggest expense, taking 30% of the budget. IT services take roughly 19% of the budget, and cloud services make up the remainder at 12%.
Reverse the trend – Here’s what you can do
- Upgrade your hardware – Hardware is likely already your biggest expense, but upgrading to the newest technologies can save you money in the long run. New processors like Intel’s Xeon Processor have delivered performance boosts up to 585% while also cutting idle power consumption by 66%.
- Automation – Server and desktop automation can make your IT department significantly more efficient. Automated tasks reduce the labor cost involved, and can even solve problems quicker if you’ve setup automated responses to events. Automation should also reduce mistakes by not having staff repeating the same processes again and again. If the automated task works right the first time, it will just keep on doing it right.
- Virtualized servers – Server virtualization can allow you to run multiple application and operating system pairs on the same physical server, reducing the number of physical servers you need. This will save you money on the cost of new servers, electricity consumption, and space.
- Cloud services – The utilization of cloud services further reduces your hardware needs. This technology allows your business to operate with even fewer servers and less storage as these can be moved to the cloud, which also makes for easier disaster recovery.
- Shared infrastructure – Consolidating your hardware can help you simplify your management costs and reduce machine maintenance and power costs. In addition, solutions like Dell’s PowerEdge VRTX server, which puts servers, storage, and switches into one machine, can also help you achieve faster application response times.
Spending to save
The old adage, that you have to spend money to make money, holds true with your IT department. New technology costs money, but pays for itself quickly and then starts saving you money while keeping your company running smoothly.