With concern over the economy’s strength and rising employment costs, most companies will be casting a critical eye over their budgets this year.
Here, we offer six suggestions on how to reduce your IT costs. We’ve focused on optimising spending rather than cutting back, allowing the budget to be allocated where it will have the most impact on driving business growth.
Tackle those legacy systems and migrate them to the cloud
Many companies still maintain legacy systems because the need hasn’t been large enough to migrate them, or the potential cost and effort seem too high. Sometimes, the status quo is easier than dealing with the headache.
However, this technical debt mounts up and leaves companies exposed to the costs of maintaining ageing systems. For example, some organisations now face a 1200% increase in VMware costs. Skillsets and support may also be harder to maintain and get costlier as time goes on. Not to mention the security vulnerabilities that come with legacy systems.
There’s no simple answer to this difficult question, and not all technical debt is avoidable. However, we should use 2025 to take a fresh look at the cost of legacy systems, as the price of inaction could become much higher.
Plot out a technical roadmap and plan to make stepwise improvements and spread investments over many years rather than doing nothing for a few years.
Bear down on licence inefficiencies…
It may not sound like a big win, but as licensing becomes more complex and companies adopt more SaaS, an increasing amount of money may be left on the table that could be better used.
Licensing inefficiency can occur in many ways: unused licences that are assigned but not actively used by someone; unassigned licences that are paid for but not allocated; and over-assigned licences, where, due to overlap, a user may have more than one licence.
The larger an organisation gets, the more your workforce grows and changes, the more these issues can compound. With some licences, like Microsoft Copilot, the costs can quickly add up, so getting to grips with licensing will become increasingly important.
Thankfully this process can be painless thanks to tools such as Clevr360, which gives you a view of your licence use and any inefficiencies across your tech estate.
… and then rationalise the company’s applications
Now that you have visibility of licence usage across the organisation, you can ask broader questions about whether certain technologies are required at all.
Companies have seen a huge rise in the number of applications they use, and as each service is added, the complexity of managing and supporting them grows.
“Leaders must systematically review their tech stack with insight from frontline workers,” Erik Bailey, CIO of IP management software maker Anaqua, told CIO. His team regularly assesses the company’s software stack, looking at integrations, security, and usage.
“A major cost-cutting measure we’re undergoing is evaluating and consolidating vendors. We’re aiming to standardise on a smaller set of tools to ultimately reach cost neutrality but greatly improve operational efficiency, productivity, and employee workloads.”
Could your support contracts need consolidation?
Over time, you may take on more partners to support different parts of your IT estate. However, some overlap may creep into contracts as partners evolve their offerings. Or, as needs change, you’re paying for support that is either no longer needed or just not aligned with your current requirements.
Take a look at all your vendors and see if their offering meets your current needs. If you haven’t spoken to them in a while, invite them in, understand what they offer and look to see where you can consolidate suppliers.
Having fewer suppliers not only reduces the complexity of management but may offer cost savings, too.
It also provides the opportunity for partners to become more engaged, be proactive and get to know your business better.
Don’t overpay for your cloud costs
How many underutilised or idle Virtual Machines (VMs) are costing your business money right now? Do you have orphaned disks that are not attached to a VM but are costing money? Sometimes, the ease of cloud provision means it’s easy to turn things on but not dial things back when projects have been completed. A regular audit will help keep costs in check.
Also, ensure that usage is rightsized to your needs. We’ve seen instances where many workloads, including dev and test environments, stay running 24/7, over the weekends and on nights when they’re not being used. Try shutting them down and only paying for the hours you actually use.
If your workloads allow it and you’re okay with lower performance, downgrade to a lower-tier VM (fewer cores, less RAM) or switch to a cheaper storage option, like locally redundant cool storage instead of globally redundant hot storage.
You can find more tips in our article: Six Azure Cost Optimisation Strategies Every Business Should Know.
The cheapest cyber attack is one that doesn’t happen
Any efficiencies you make will soon be wiped out in the face of a cyber attack. Whether it’s disruption to operations, damage to reputation or money spent directly on the cleanup – the fallout from an incident could be very damaging.
That’s why an investment in security may require some upfront spend, but the potential savings by avoiding an attack will provide far greater benefits in the long run.
A key place to start is with End Point Detection & Response (EDR), a cybersecurity solution that continuously monitors all endpoints, such as mobiles, laptops, desktops, and other IoT devices, to detect and mitigate threats.
Meanwhile, Extended Detection and Response (XDR) takes EDR one step further and extends the detection and response capabilities to include your network and cloud infrastructure.
Delve into this more in our article: What are EDR, XDR, MDR & MXDR?
Cost reduction doesn’t have to be painful
IT is complex, and as an organisation grows, inefficiencies can creep in. Especially after the pandemic, teams had to adapt fast, but now is the time to take a stock check.
With the right visibility and using tools such as Clevr360, it’s possible to gain greater visibility into your IT estate and make driving efficiency an everyday KPI for your team rather than an ad hoc event.
