It’s that time of year again: budget season.
Licensing. Hardware. Staffing. Security. Projects. The familiar IT line items are making their way back onto spreadsheets as organizations begin planning for 2027.
But what should you be doing differently this year?
While the budgeting process may be familiar, the technology landscape isn’t. VMware costs have shifted dramatically. Microsoft products continue moving through their lifecycles. Experienced IT resources are getting harder to find. AI has moved from “someday” to something every organization should at least be exploring. And cybersecurity investments increasingly need to line up with what your cyber insurance carrier expects.
So, some of the biggest IT budget decisions heading into 2027 aren’t simply about what things cost. They’re about what’s changing — and whether your organization is prepared for it.
That makes now an important time to look beyond last year’s IT budget and ask a different question: What will your technology environment need in 2027 that you aren’t budgeting for today?
Here are five places to start.
If VMware is part of your environment, you already know the economics have changed. Some DMC clients are seeing VMware renewal costs increase three to six times over previous agreements. That means simply carrying last year’s licensing number forward could leave a significant hole in your 2027 budget.
The good news: you have options.
Depending on your existing hardware, infrastructure strategy and business requirements, you might stick with VMware, migrate to Microsoft Hyper-V, move your VMware environment to hosted infrastructure or consider an alternative such as Scale Computing.
But these decisions take time.
A virtualization migration is a project, not a purchase. If your VMware renewal falls in 2027, use budget season to start evaluating your options now — ideally at least four months before renewal.
Technology projects require people to make them happen. And those people are becoming harder to find. As experienced IT resources become scarcer, organizations need to think realistically about what their internal teams can accomplish — and where outside support may be necessary.
Look at the projects on your 2027 roadmap. Do you have the internal capacity and expertise to complete them? Or will you need managed services, project support or specialized expertise?
That support should be part of the budget from the beginning rather than an unexpected expense when an already-stretched IT team runs out of bandwidth.
A software upgrade can quickly become a hardware expense.
As Microsoft products and versions reach the end of their supported lifecycles, moving forward may require more than installing new software. Older machines may not support newer operating systems, which means some hardware will need to be replaced, too.
Take inventory before you finalize your 2027 budget.
Which operating systems, servers and Microsoft technologies are approaching the end of their useful or supported life? Which machines can be upgraded? Which needs to be replaced?
Identifying those needs now helps you prioritize replacements, plan projects and avoid having lifecycle deadlines dictate technology decisions later.
It’s also worth reviewing your overall Microsoft environment. Licensing and technology needs change, and budget season is an opportunity to determine what you’re paying for, what you’re using and where you may be able to reduce or redirect spending.
You don't need a fully developed AI strategy to put AI in your 2027 budget. In fact, figuring out your strategy may be exactly what you should budget for.
Organizations are moving beyond asking whether AI matters and beginning to determine where it can deliver meaningful business value. That requires experimentation.
Consider creating an AI budget for consulting, testing tools or building a controlled sandbox where your team can explore potential applications without committing to a major implementation.
Maybe AI can automate a repetitive process. Improve access to internal information. Help employees work more efficiently. Or maybe an experiment shows that a particular use case isn't worth pursuing.
That’s valuable information, too.
The important thing is to create room to learn. Even a relatively modest investment can help your organization move from talking about AI to understanding what it could realistically do for your business.
Cybersecurity and cyber insurance shouldn't live in separate conversations. Insurers increasingly have expectations around the security controls organizations maintain. Your 2027 planning process is an opportunity to review those requirements alongside your existing cybersecurity posture.
What does your policy require? Do your current security practices align with those expectations? Where are the gaps?
The answers can reveal priorities that belong in next year's budget — from technology and monitoring to managed security services and other improvements.
This is also where broader compliance requirements can come into play. Instead of treating security as another annual technology expense, use the budgeting process to make sure your investments address the risks and requirements your organization actually faces.
The easiest way to build an IT budget is to start with last year's numbers. It may also be the easiest way to miss what’s coming.
Before locking in your 2027 technology spending, give your current environment a well-check.
You may uncover expenses that need to be added. But you may also find opportunities to reduce costs, use existing investments differently or make a strategic change before an approaching deadline forces the decision.
DMC Technology Group can help you do both. We can review your current technology environment, identify potential gaps and opportunities, and provide the project and technology estimates you need to build a more realistic 2027 IT budget.
Planning your 2027 technology budget? Contact DMC Technology Group to start with an IT health check.
