September and October are the months when most SMEs finalise their budget for the following year, and IT is usually included as a single line item — “IT: same as last year plus 5%”. Then March comes around, a server breaks down, the price of a licence changes, and the budget line is blown. This article proposes a more useful way of budgeting for IT in 2027: six budget headings, three dates that trigger expenditure, and a decision on what should be a fixed cost and what should be an investment.
The six headings of an IT budget
- Support and managementwho keeps the IT running — internal team, external supplier or both. Includes monitoring, helpdesk and maintenance.
- Licensing and subscriptionsMicrosoft 365, management software, antivirus, backup, per-user tools. It tends to grow without anyone noticing.
- User equipmentlaptops, workstations, monitors, mobile phones. Costed per renewal cycle, not per fault.
- Infrastructureservers, storage, network, Wi-Fi, firewall, UPS. Longer cycles, higher values, decisions that are planned a year in advance.
- Security and continuityendpoint protection, managed firewall, off-site backups, recovery plan. Increasingly non-negotiable — NIS2 and insurance policies demand it.
- Communications: Internet (ideally two connections), telephony, connections between offices.
If your current budget does not distinguish these six lines, start by separating them using the 2026 values. It is half a day's work and it is what allows you to decide anything.
Three dates that force expenditure in 2027
- Windows 10 out of support since October 2025. Stations that have not yet migrated are accumulating risk. If they are left until 2027, the user equipment budget must reflect the replacements — see what to do about the end of Windows 10 support.
- Windows Server 2016 out of support in January 2027. Servers in this version have to be replaced, virtualised or migrated during the year. The decision is explained on the about page servers and virtualisation.
- NIS2 in force. For the covered entities, and for many of their suppliers, 2027 is the year by which the measures must be demonstrable. See if your company is covered.
What to pass to fixed cost
Computing has two natures: the one you buy (hardware, projects) and the one you pay for every month (support, licences, security, communications). The common mistake is to treat support like the first — paying by the hour when something breaks — which makes the budget unpredictable and, worse, creates an incentive not to call anyone while things are “ticking along”. A support contract with a fixed monthly fee and a written SLA does the opposite: the cost is known in January and the supplier has an interest in prevention. We compared the models in IT Unlimited vs. retainer, block of hours and outsourcing and we explained how much does IT support for a company cost.
What to cut without risk
- Licences allocated to accounts belonging to people who have left the company, or Microsoft 365 plans that exceed what each role actually uses. In a company with 50 workstations, it is common to find between 10 and 15% excess licences.
- Duplicate subscriptions: two antivirus products, two meetings tools, three cloud storage tools.
- Maintenance of end-of-life equipment. Repairing a 7-year-old laptop costs more than writing off a new one.
- Old communications contracts. Debts and prices have changed; a request for a review from the provider usually pays off.
What not to postpone
Off-site and tested backups; multi-factor authentication; actively managed firewall; replacement of unsupported systems. These are the four points which, when they fail, bring the company to a halt or expose it to a fine — and none of them are expensive relative to the damage. If the budget only stretches to one thing in security, it is the first on the list: a company with tested backups survives almost everything else.
A rainy-day fund
Even if everything is planned, set aside 10% of the total for the unforeseen: a piece of equipment that breaks down prematurely, a change in the law, or unexpected growth. If, at the end of the year, the reserve has not been used, it can fund the next renewal. If there is no reserve, the unforeseen costs will be covered by another budget line — usually safety, which is the one you notice least when funds are short.
How to request comparable proposals
When asking for support proposals for 2027, ask everyone for the same thing: number of stations and servers, what is included (call-out travel? out of hours? projects?), written response times by priority, what happens when the contract ends. Without this, you are comparing monthly fees that do not cover the same thing. Our article on what to include in an IT contract It has the complete list.
Frequently Asked Questions
How much should an SME spend on IT?
It depends on the sector and the systems involved, but for service companies with between 10 and 100 staff, the usual benchmark ranges from 3% to 6% of turnover, including staff, licences and equipment. More useful than the percentage is knowing where the money goes — hence the six categories.
Is it better to buy equipment or hire it?
Buying gives control and works out cheaper after 4-5 years; renting turns everything into a monthly cost and simplifies renewal. For workstations both work; for servers, the right question is whether you still need one.
Should the support be internal or external?
Below 100 stations, a full-time internal technician rarely pays off and creates a single point of failure (holidays, leaving). Many companies combine an external contract with an SLA and an internal relationship manager. We compared the two in internal IT support or outsourcing.
When should I start budgeting?
September and October, with the updated inventory. Equipment renewals and server replacements require delivery times and migration windows that are planned months in advance.
Want an IT quote with real figures for your company?
We carry out an inventory of the hardware and licences, identify what expires in 2027 and deliver a plan with fixed costs and separate investments. See the IT Unlimited or call 211 459 950.
