How to Lower Your Company’s Technology Costs while Increasing Uptime

Technology costs can be expensive. The average small to medium-sized business (SMB) spends 6.4 percent of its annual revenue on IT expenses, according to AMR Research. An in-house IT technician can cost $58,000 or more a year, equivalent to $4,833 a month, while outsourced IT can range from $1,000 to $2,500 a month, North Star, Inc. estimates. These expenses increase when you experience system downtime problems. A minute of downtime costs the average SMB $7,900 per minute, says Ponemon Institute.

Keeping these kinds of expenses under control is vital in order to maintain a sustainable profit margin. Here are some ways to cut technology costs through a simplified and unified infrastructure while increasing your uptime.

IT Infrastructure

IT infrastructure can be one of the most expensive components of technology expenses for businesses. Cost breakdowns for on-premises IT data centers include server hardware, power consumption and physical storage space. When deploying cloud IT infrastructure, these costs are factored into your monthly subscription and shared between your provider’s clients. While they can vary from one organization to another, cloud deployments tend to be less expensive. Microsoft estimates that in a fully realistic scenario, an on-premises IT solution will cost an average of at least $12,000 a month, whereas a cloud deployment will average closer to $8,000 a month, representing a 30 percent savings.

Cloud-based IT infrastructure solutions also improve server uptime. Cloud providers use backups in multiple locations so that if one location has a power outage or similar issue, it will not affect the client’s server. Due to this, cloud providers are able to offer guaranteed uptime — measured in “nines” such as 99.9 percent guaranteed uptime, 99.99 percent, 99.999 percent, and so on — which translates into the number of minutes of downtime you can expect per year. Check your provider’s uptime guarantee when choosing a cloud provider.

Communications Costs

Another place the cloud can be leveraged to cut costs is communications expenses. For phone communications, a traditional private branch exchange (PBX) system incurs expenses for hardware installation, monthly equipment rental, training, support and minutes of usage. A cloud-based hosted PBX system trims equipment installation and rental costs and monthly usage fees significantly. Communications technology provider 8x8 estimates that using a virtual phone system can cut deployment costs by 90 percent and monthly fees by 50 percent.

Cloud-based deployments can likewise help trim teleconferencing expenses. Wainhouse Research reports that traditional room-based videoconferencing systems can cost tens of thousands of dollars or more in equipment installation and rental, and support fees. Cloud-based videoconferencing solutions trim equipment costs dramatically to well under $1,000 and in some cases even under $100, says.

You can increase the cost efficiency of a cloud communications solution that combines multiple communications tools into a unified communications system. For instance, if you get a system where your internet, phone and videoconferencing solutions are bundled as a package and integrated with your office suite software, you can save significantly, while simplifying your technology management in the process.


Using integrated cloud solutions can also help cut your software spending and simplify your technology. For example, Microsoft’s Office 365 suite comes with a wide range of software built in, including productivity tools, email and calendar features, online meeting and videoconferencing capability, task management tools and file sharing features. Similarly, Quickbooks Online includes a full range of accounting features and easily integrates with software for other financial management applications, including tax preparation, inventory management, expense reporting and payroll.

These types of integrations can cut costs both indirectly by increasing automation efficiency and directly by avoiding the licensing fees associated with desktop software. For instance, using Adobe’s Creative Cloud instead of the desktop equivalent translates into savings of approximately $1,400 every six years when total fees including upgrades are taken into account, Above the Law reports.

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