Why is IT so expensive?
Transparent breakdown of where IT costs come from. Understand what you're paying for and the hidden costs of cheap IT.
“IT seems really expensive” is something we hear often. Let’s break down where the costs actually come from - and why cheap IT often costs more in the long run.
Where IT Costs Come From
1. People Are Expensive (And Necessary)
The biggest IT cost is human expertise. Here’s what qualified IT professionals earn in San Diego:
| Role | Salary Range | With Benefits |
|---|---|---|
| Help Desk Technician | $45,000 - $60,000 | $58,000 - $78,000 |
| Systems Administrator | $70,000 - $95,000 | $91,000 - $123,000 |
| Network Engineer | $80,000 - $110,000 | $104,000 - $143,000 |
| Security Analyst | $85,000 - $120,000 | $110,000 - $156,000 |
| IT Manager | $100,000 - $140,000 | $130,000 - $182,000 |
When you use managed IT services, you’re sharing these costs across multiple clients. That’s how you get enterprise-level expertise at SMB prices.
2. Software Licensing Adds Up
Modern business software is almost entirely subscription-based:
| Software | Per User/Month |
|---|---|
| Microsoft 365 Business Premium | $22 |
| Google Workspace Business | $12-18 |
| Endpoint security (EDR) | $10-25 |
| Backup service | $5-15 |
| VoIP phone system | $20-35 |
| Password manager | $5-8 |
| Remote management tools | $3-5 |
For a 25-person company, just software licensing can easily reach $2,000-$4,000/month.
3. Hardware Isn’t Cheap
Quality business equipment costs more than consumer gear:
| Item | Price Range | Replace Every |
|---|---|---|
| Business laptop | $1,000 - $2,000 | 4-5 years |
| Desktop workstation | $800 - $1,500 | 5-6 years |
| Server | $5,000 - $25,000 | 5-7 years |
| Firewall | $500 - $3,000 | 5-7 years |
| Network switch | $200 - $2,000 | 7-10 years |
| WiFi access point | $200 - $500 | 5-7 years |
Amortized over their lifespan, a 25-person company’s hardware costs $500-$1,500/month.
4. Security Isn’t Optional Anymore
Basic security in 2025 requires:
| Security Layer | Monthly Cost (25 users) |
|---|---|
| Endpoint protection | $250-$625 |
| Email security | $75-$200 |
| Backup & recovery | $200-$500 |
| Firewall licensing | $50-$150 |
| Security training | $50-$100 |
| Monitoring/SIEM | $250-$500 |
Total: $875-$2,075/month just for security
Ten years ago, antivirus was enough. Today’s threats require layers of protection.
5. Complexity Has Increased
Modern IT environments are more complex than ever:
- More devices: Laptops, phones, tablets, IoT
- More locations: Office, remote, hybrid
- More applications: SaaS sprawl is real
- More integrations: Everything needs to connect
- More compliance: Regulations multiply yearly
- More threats: Attackers are more sophisticated
Managing this complexity requires more expertise and better tools.
The Hidden Costs of Cheap IT
When businesses try to minimize IT spending, they often end up paying more. Here’s how:
Downtime Costs
Scenario: Your server crashes. Cheap IT takes 8 hours to respond and another 8 hours to fix.
Direct cost: 16 hours × 25 employees × $50/hour average = $20,000 in lost productivity
Quality IT: Monitoring catches the warning signs. Issue fixed in 2 hours. Cost: $2,500
Savings from quality IT: $17,500 on ONE incident
Security Breach Costs
Average SMB breach cost: $120,000-$200,000
Quality IT investment: ~$1,500/month in proper security = $18,000/year
Math: The cost of one breach equals 7-10 years of proper security investment.
Productivity Losses
Cheap IT symptom: Slow computers, constant issues, frustrated employees
Hidden cost: 30 minutes/day/employee lost to IT friction
25 employees × 0.5 hours × 250 workdays × $35/hour = $109,375/year
Quality IT investment to fix: $20,000 in hardware refresh + better support
Opportunity Costs
Cheap IT reality: Can’t adopt new tools, can’t support growth, can’t move fast
Cost: Lost deals, missed opportunities, falling behind competitors
Hard to quantify, but very real.
What You Should Be Getting for Your Money
When you pay for quality IT, you should receive:
Proactive Management
- 24/7 monitoring (issues caught before you notice)
- Regular maintenance (prevent problems)
- Security updates (stay protected)
- Capacity planning (never run out of resources)
Responsive Support
- Fast response times (15-30 minutes for critical)
- Knowledgeable technicians (not reading scripts)
- Local presence (someone can come on-site)
- After-hours availability (problems don’t respect business hours)
Strategic Value
- Technology roadmap (planned, not reactive)
- Budget forecasting (no surprises)
- Business alignment (IT supports your goals)
- Vendor management (someone advocates for you)
Security and Compliance
- Current protection (not just antivirus)
- Compliance guidance (if applicable)
- Incident response (when, not if)
- Employee training (people are the weakest link)
Questions to Ask About IT Costs
When Evaluating Providers
- What’s included vs. extra? Get specifics
- What’s your average response time? Get data
- Who will be supporting us? Meet them
- What security is included? Modern standards?
- What happens when we grow? Does pricing scale fairly?
When Evaluating Your Current Spending
- What are we paying for that we don’t use?
- What should we be paying for that we’re not?
- What’s our cost of downtime?
- What’s our security risk?
- Is our IT supporting or limiting growth?
The Value Equation
IT shouldn’t be evaluated purely on cost. Consider:
Total Cost of Ownership:
- Monthly/annual fees
- Hidden costs (downtime, productivity loss)
- Risk costs (breaches, compliance failures)
- Opportunity costs (what you can’t do)
Value Delivered:
- Uptime and reliability
- Security and risk reduction
- Productivity gains
- Growth enablement
- Peace of mind
The right question isn’t “How do we spend less on IT?”
It’s “How do we get maximum value from our IT investment?”
When IT Should Cost More
Be willing to invest more if:
- You’re in a regulated industry - Compliance isn’t optional
- Downtime is extremely costly - Revenue depends on uptime
- You handle sensitive data - Breaches are existential threats
- Technology is competitive advantage - You need to lead, not follow
- You’re growing fast - Infrastructure needs to scale
When IT Can Cost Less
Look for savings if:
- You have unused licenses - Audit regularly
- You have redundant tools - Consolidate
- You’re over-engineered - Right-size solutions
- You haven’t negotiated recently - Vendors expect it
- Your needs are simple - Don’t overbuy complexity
The Bottom Line
IT is expensive because:
- Skilled people cost money
- Quality tools cost money
- Security costs money
- Complexity costs money
Cheap IT is expensive because:
- Downtime costs more than prevention
- Breaches cost more than security
- Lost productivity costs more than good tools
- Missed opportunities cost more than capability
Invest appropriately in IT. It’s not where you want to cut corners.
Not sure if you’re getting value for your IT spend? Contact us for an honest assessment.
Have More Questions?
Our team is here to help. Whether you're evaluating IT services or have a specific question about your technology, we're happy to have a conversation.