IT Spending Trends & Cost Optimization in 2025

Reid Johnston

Welcome back to another episode of Visionary IT.

Gar Whaley

Today, we're diving into something every SMB needs to keep an eye on—how IT spending is shaping up in 2025 and what it means for businesses navigating a fast-evolving tech landscape.

Reid Johnston

Yeah, I mean, these trends aren’t just numbers. They’re a roadmap to where opportunity is and where risk might sneak up on you if you don’t look ahead. It’s kind of impossible to ignore how much cybersecurity, AI, and automation keep transforming the way SMBs operate.

Gar Whaley

Absolutely. And with the overall IT spending projected to increase significantly globally, today's episode is all about making sense of those drivers and, more importantly, showing how to stay ahead of the curve—strategically.

Reid Johnston

Right. And the best part, at least for me, is breaking it all down into something listeners can actually use. Because let’s be real—none of this matters if you can’t apply it to your business.

Gar Whaley

That's exactly why we’re here. So whether you're managing growing pains or planning your next move into AI or automation, stick with us.

Reid Johnston

Alright, let’s get into it.

Gar Whaley

Alright, let’s dive right into the numbers—IT spending for 2025 is set to grow by 9.3%, hitting a remarkable 5.75 trillion dollars globally.

Reid Johnston

Whoa, that’s wild! 9.3% doesn’t sound like much until you realize that’s trillions we’re talking about. And it makes you wonder—what’s really driving that?

Gar Whaley

Good question! It’s coming down to a few heavy hitters: cybersecurity enhancements, automation, and the adoption of AI and blockchain. Cybersecurity alone accounts for over half of businesses planning to increase their spending.

Reid Johnston

Alright, let’s pause there for just a second. Cybersecurity, I get—you’ve got growing threats and compliance concerns—but blockchain? You mean, cryptocurrency?

Gar Whaley

Not just cryptocurrency. Blockchain’s applications go far beyond that, like smart contracts in supply chain management or even verifying identities securely. It’s all about transparency and trust. And as it matures, more industries are seeing real value in adopting it in their business.

Reid Johnston

Got it. And for SMBs this means staying curious. If your bigger competitors are diving into blockchain or leveraging AI, it’s probably worth at least exploring what that could mean for your business.

Gar Whaley

Exactly. Couple that with automation—76% of leaders are identifying it as their best opportunity to deliver value. Automating workflows or processes doesn’t just save time, it frees up resources that businesses can reinvest elsewhere.

Reid Johnston

And that’s where the competitive edge comes in. Adopting these tools helps smaller teams punch above their weight, so they’re not getting swallowed in the market.

Gar Whaley

Right. And AI is kind of the umbrella tying all this together. From predictive analytics to customer behavior insights, it’s reshaping industries. Companies not investing in tools like Microsoft Copilot are, frankly, at risk of falling behind. The pace of change isn’t slowing.

Reid Johnston

Yeah, it’s like not jumping on Windows updates back in the day—you’re gonna get left in the dust.

Gar Whaley

Exactly. And the trick here is figuring out how SMBs can leverage these trends practically, while managing the costs effectively.

Reid Johnston

That’s the sweet spot, right? Innovating without going way over budget.

Gar Whaley

Speaking of managing costs effectively, let’s shift gears a bit and dive into strategic IT budget allocation. A big part of finding that sweet spot we talked about lies in understanding the difference between OPEX—operational expenses—and CAPEX, or capital expenses.

Reid Johnston

Okay, break that down for us. What are we really talking about here?

Gar Whaley

So, for those who might not know, operational expenses are your recurring costs...subscriptions for software, managed services, that sort of thing. CAPEX, on the other hand, is your big-ticket upgrades...like replacing outdated hardware or rolling out new infrastructure. Unfortunately, businesses often miscalculate how much to allocate to each.

Reid Johnston

Right. You either overspend, or worse, you underspend and suddenly your tech is...well, a liability.

Gar Whaley

Exactly. The key is setting realistic spending thresholds based on your industry. Take healthcare SMBs, for example. Many allocate a larger portion of their budget to cybersecurity and telemedicine solutions. That makes sense when you’re dealing with sensitive data and patient care.

Reid Johnston

Oh, like that case we worked with last year, the clinic that wanted to balance both? They had to upgrade their network security while also rolling out remote patient monitoring tools.

Gar Whaley

Yes, and the strategy was simple but effective. They used managed IT services to optimize costs and ensure that both investments delivered real ROI.

Reid Johnston

Managed IT is such a game-changer, isn’t it? I mean, instead of hiring an in-house team, you’re essentially renting expertise when you need it.

Gar Whaley

That’s the beauty of it. When SMBs spend around $110 to $400 per user per month, they’re not just saving money—they’re also getting strategic guidance. It’s proactive, not reactive. And that keeps costs under control over the long term.

Reid Johnston

Which ultimately gives business owners peace of mind. I mean, let’s face it, who wants to be the one worrying about ransomware attacks at 3 a.m.?

Gar Whaley

Exactly! Budgeting isn’t just about what you spend; it’s about what you prevent from happening, too. Strategic allocation ensures you’re prepared, no matter what comes your way.

Gar Whaley

Building on strategic allocation, let’s talk about future-proofing your IT strategy. It’s a concept we hear a lot about, but what does it actually mean for SMBs?

Reid Johnston

It’s really about staying flexible. The tech landscape is shifting so fast—being ready to adapt is kinda the name of the game.

Gar Whaley

Right. And one of the biggest enablers of that flexibility? Cloud solutions. Scalable, cost-effective, and capable of supporting growth while keeping pace with evolving technologies. The trick is choosing the right mix of platforms and services that align with your specific business needs.

Reid Johnston

Totally. We’ve seen this work firsthand. Remember that financial firm we worked with last year—the one juggling compliance headaches and rising storage demands?

Gar Whaley

I do. They were struggling to manage their on-site infrastructure while staying compliant with regulations. By transitioning to a cloud-first model, not only did they reduce costs, but they also improved their operational efficiency. Plus, they improved security—which is a priority when you’re dealing with financial data.

Reid Johnston

And implementing cloud tools streamlined their reporting process, right? I mean, before, it took weeks to audit their data. With the new system, they were running their reports in, what, minutes?

Gar Whaley

That’s right. And that freed up their team to focus on higher-value tasks. It’s a great example of how future-proofing empowers people to do more by giving them the right tools.

Reid Johnston

Speaking of people, can we talk about employee training for a second? I feel like that’s the unsung hero of future-proofing. I mean, even the best tech goes sideways if your team doesn’t know how to use it—or worse, if they accidentally create vulnerabilities.

Gar Whaley

Absolutely. Comprehensive training in cybersecurity basics is non-negotiable. From phishing awareness to safe password practices, these trainings might seem simple, but they’re incredibly effective at minimizing risks.

Reid Johnston

For sure. And, hey, here’s a tip for our listeners—use visual tools to communicate these things! Whether it’s training employees or pitching budgets to stakeholders, data visualizations make your message land stronger. Charts, dashboards, videos—they work wonders.

Gar Whaley

Couldn’t agree more! Clear communication ensures buy-in, whether it’s from your team or the decision-makers holding the purse strings. And when everyone’s on the same page, your IT strategy has a better chance of succeeding.

Reid Johnston

Exactly. So, to wrap it up: be flexible, keep investing in your people, and don’t skimp on communication. This is how SMBs can future-proof effectively.

Gar Whaley

And on that note, that’s all for today. Thanks for joining us to explore a smarter approach to IT spending and strategy!

Reid Johnston

Yeah, thanks for tuning in. Until next time, stay visionary and stay secure.