21 Oct 2026

What Should a 50-Person Business Spend on IT Each Year?

Subscriptions, support contracts, software licences and equipment purchases are often spread across multiple suppliers and departments.

If you don’t know exactly what you’re spending, how can you know whether you’re getting good value?

1. Start with an IT spending audit

Before setting a budget, establish what you’re currently spending.

Review the last 12 months of invoices and identify your recurring costs. For a typical 50-person business, we’d expect to see:

Microsoft 365: Email, Office applications, Teams and associated licensing.
IT support: Helpdesk, maintenance, infrastructure management and technical advice.
Business applications: CRM, ERP, accounting, payroll and specialist software.
Cybersecurity: Endpoint protection, firewalls, email security and staff training.
Backup: Cloud backup, server backup and disaster recovery.
Connectivity: Broadband, leased lines, backup connections and telephony.
Website and domains: Hosting, domain renewals and associated services.

Microsoft 365 and IT support are often the two largest core IT expenses, although specialist business applications can easily exceed both.

Look for unused licences, duplicated services, unnecessary subscriptions and contracts that haven’t been reviewed for years.

You might be surprised by what you find.

2. Are you paying too much for IT support?

Most IT providers charge a fixed monthly amount based on the number of users or devices.

But why should a well-managed business generating relatively few support requests pay the same as one requiring significantly more assistance?

At FOS.net , we believe there’s a fairer way.

Our consumption-based support model calculates your monthly cost around anticipated support demand, rather than simply charging for every employee.

Here’s how the numbers could look for a 50-person business:

IT support model	Annual cost
Traditional per-user support (£20/user/month)	£12,000
Prepaid incident-based support (illustrative)	£15,000
FOS.net consumption-based support (18 calls/month)	£7,800

That’s a potential saving of £4,200 per year — 35% compared with the per-user example.

These are illustrative comparisons, not like-for-like quotations. Actual pricing depends on support demand, the IT environment and what’s included.

Importantly, our service isn’t just a reactive helpdesk.

Proactive auditing, maintenance, housekeeping, reporting and IT budgeting are built into our standard managed service.

We continually review your environment, identify potential problems and look for opportunities to improve efficiency and control expenditure.

It’s about getting better value, not simply cheaper support.

3. What should a 50-person business budget for IT?

We recommend splitting expenditure into three categories.

Recurring operating expenditure (OPEX)

This includes Microsoft 365, IT support, business applications, cybersecurity, backup and connectivity.

For a typical 50-person business, we’d suggest a planning allowance of £30,000–£40,000 annually .

That assumes a relatively straightforward IT environment without particularly expensive specialist software.

Asset replacement and lifecycle management

Computers, servers and network equipment need replacing periodically.

For example, 50 laptops costing £900 each, replaced over five years, equates to £9,000 annually.

Allowing for additional networking and infrastructure equipment, a reasonable annual budget would be £10,000–£15,000 .

Planned infrastructure and improvement projects

Server replacements, cloud migrations, network upgrades and other improvements should be anticipated rather than treated as unexpected costs.

We’d suggest setting aside £5,000–£10,000 annually as a planning allowance, adjusted to reflect your technology roadmap.

4. So, what's a reasonable annual IT budget?

For a typical 50-person business, here’s a practical benchmark:

Budget category	Annual range
Recurring IT operating costs	£30,000–£40,000
Asset lifecycle replacements	£10,000–£15,000
Planned projects and improvements	£5,000–£10,000
Total annual IT budget	£45,000–£65,000

That’s approximately £75–£108 per employee per month , excluding VAT.

These are illustrative planning figures for a business with a relatively straightforward IT environment. Specialist ERP systems, extensive infrastructure or complex compliance requirements can increase expenditure.

The objective isn’t to spend a particular amount. It’s to understand your costs, eliminate waste and plan future investment.

5. Good IT budgeting should be standard, not an expensive extra

At FOS.net , we believe IT budgeting should be part of your ongoing IT management, not something you only revisit when there’s a problem.

That’s why we provide IT budgeting as standard for our managed clients.

Our approach includes:

Subscription budgeting: A consolidated view of recurring costs, contract renewals and opportunities to eliminate unnecessary expenditure.
Asset lifecycle planning: Identifying ageing equipment and forecasting replacement costs over the coming years.
Technology roadmaps: Planning infrastructure upgrades, improvements and projects before they become urgent.

For a Finance Director, that means greater transparency, more predictable expenditure and fewer unwelcome surprises.