There’s a scary amount of money being spent on cloud and business technology right now. Synergy Research Group clocks total revenue generation for the cloud market at $180 billion for 2017, and Gartner estimates global IT spending to exceed $3 trillion in 2018. What’s scary about these dollar amounts is not how much money is being spent but how much money is being wasted.
Emptying the Trash Can — How Much Money Is Being Wasted on Technology
When it comes business technology, spending more and spending smart are two different things — a fact that many business leaders are learning the hard way. In RightScale’s 2017 State of the Cloud Report, decision makers admitted that as much as 45% of their cloud spend was wasted last year, and calculations from ParkMyCloud project $12.9 billion will be wasted on cloud investments this year.
The truth is, large enterprises have the budgets to back up poor technology investments. But if you’re a cash- and resource-strapped small- or mid-market business (SMB), you likely have to be much more strategic with where you put your technology dollars — especially if you’re going to continue spending the way most SMBs are across the globe.
Breaking Down SMB Technology Spending
- SMBs account for 40% of total IT spending from businesses of all sizes (taken from Gartner’s Forecast Overview: Small-and-Midsize-Business External IT Spending, Worldwide, 2017 via GetApp).
- A study from Alinean Inc. found that small business IT spending more than doubles that of large enterprises.
- McKinsey & Company has estimated SMBs make up as much as $85 billion of the global cloud market.
- Deloitte reported that nearly 70% of SMBs will increase their cloud technology spend over the next three years.
- TechAisle ranked “budget constraints” as the number-one IT challenge for SMBs last year
Big Spending, Bigger Opportunity for SMBs
The financial outlook for SMBs may not be as grim as these statistics let on. On the contrary, the widespread availability of enterprise-level technology presents you with a sizable opportunity to do more with less without resorting to some sort of improvised, hacked-together technology stack. Let’s prove it.
Launching a Company with a $200 Technology Budget
You could launch a business from scratch tomorrow for $200, and you’d get all the technology and collaboration capabilities necessary to compete with the largest, most successful enterprises. To do it, you only need to address three (well, four) components.
1. Office Space — $0
Unnecessary. You’ve heard the stories about Facebook being launched in a dorm room or Amazon being based out of Jeff Bezos’ garage — and that was decades ago. Commercial office space is even less necessary in today’s age of bring-your-own-device (BYOD), where organizations can be virtually run via personal phones, tablets and devices. Some of the most successful companies on the planet are even reducing overhead costs by offering fully remote careers, including Amazon, Dell and UnitedHealth Group. Bottom line: Office space is a nice-to-have, not a need-to-have in today’s business climate.
2. Internet — < $70/Month
It’s completely reasonable to find high-quality Internet service under $70 per month and well under $100 per month. You can get business Internet services from major carriers like CenturyLink, Comcast and AT&T for these price points, and if you really want to shell out for high-speed, dedicated Internet, Verizon Fios (their new gigabit product) is offered for as little as $84.99.
3. Phone — < $30/Month
CenturyLink and Comcast both offer business phone services for under $30 per month. This gives you premium voice-over-Internet-protocol (VoIP) features like five-way calling and mobile compatibility. If you’re interested in getting more bang for your buck, you can also take advantage of Internet, phone and business service bundles. AT&T offers one for $85 a month.
4. Email and Collaboration — < $10/Month
Business collaboration is easier — and cheaper — than ever thanks to Internet giants like Microsoft and Google. Solutions like Microsoft’s Office 365 and Google Cloud’s G Suite have taken the democratization of collaboration technology to new levels of accessibility and affordability. Both products, which unify email, chat, video, file sharing and more, are available to you for less $10 per user per month. Facebook is even getting into the action with their new Workplace solution, offering similar collaboration tools.
Grand Total — $110
Get Even More Value from Your Technology Spend
This total doesn’t factor in the labor costs of managing your technology stack or the number of employees needing licenses, but launching a collaboration technology stack for under $200 isn’t too bad. One way to get even more value out of your technology budget is by working with a provider who understands your business, technical and end-user needs. If you’d like a few helpful insights for choosing the right solution provider and getting more mileage out of your technology spend, check out our article, “How to Choose a UC Provider.” It’s a great place to start.