How much should a small business spend on IT infrastructure?

Most small businesses spend 3-6% of revenue on technology, including infrastructure, software, and IT support. A company with $1 million in revenue might spend $30,000-60,000 annually. This includes hardware refreshes, software licenses, cloud services, and managed IT services . Underinvesting leads to reliability issues and security gaps; overinvesting wastes resources.

Should my small business move everything to the cloud?

Most small businesses benefit from a "cloud-first" approach for new initiatives, but a complete migration is not always optimal. Consider cloud for email, collaboration, backup, and applications that benefit from anywhere access. On-premises may still make sense for high-performance workloads, large file storage, or specific compliance requirements. A managed service provider can help evaluate the best approach for your situation.

How often should we replace IT infrastructure equipment?

General guidelines: Workstations every 4-5 years, servers every 5-6 years, network equipment every 5-7 years. Cloud resources eliminate this concern for virtualized infrastructure. The key is proactive replacement before failures cause business disruption. Equipment past its useful life also stops receiving security updates.

Do we need an on-site server or can we go serverless?

Many small businesses can operate without on-premises servers by using cloud services and SaaS applications. Microsoft 365 handles email and files, cloud backup protects data, and most line-of-business applications now offer cloud versions. However, some specific requirements—very large file operations, specialized software, or certain compliance needs—may still require on-premises computing. Evaluate your specific workflows before deciding.

Understanding IT Infrastructure Basics | A Business Guide

The Core Components of IT Infrastructure

Every business IT environment, regardless of size, consists of several interconnected components:

Computing Resources - Physical or virtual servers that run applications and process data. This may be on-premises servers, cloud virtual machines, or a hybrid of both.

Networking - Routers, switches, firewalls, and wireless access points that connect users to resources and the internet. The network is the highway that everything else depends on.

Storage - Systems that store business data, from file servers and NAS devices to cloud storage services like OneDrive and Egnyte.

End-User Devices - Computers, laptops, tablets, and phones that employees use daily. These are often the most visible part of IT but just the tip of the iceberg.

On-Premises vs. Cloud Infrastructure

Modern businesses typically use a hybrid approach, combining on-premises and cloud resources based on specific needs:

On-Premises Infrastructure - Physical servers and equipment in your office or data center. Offers maximum control and can be required for certain compliance requirements. Requires upfront capital investment and ongoing maintenance.

Cloud Infrastructure (IaaS) - Virtual servers and resources from providers like Microsoft Azure or AWS. Offers flexibility, scalability, and shifts costs from capital to operating expenses. Ideal for variable workloads and disaster recovery.

Software as a Service (SaaS) - Fully managed applications like Microsoft 365, Google Workspace, or Salesforce. The vendor handles all infrastructure—you just use the software. Most small businesses now rely heavily on SaaS.

Building a Reliable Network Foundation

Your network is the backbone of IT infrastructure. Key considerations include:

Internet Connectivity - Business-grade internet with sufficient bandwidth for your needs. Consider redundant connections from different providers for critical operations.

Internal Network - Managed switches with proper VLAN segmentation to separate traffic and improve security. Guest WiFi should be isolated from your business network.

Firewall/UTM - A next-generation firewall is the gatekeeper between your network and the internet. It should provide threat prevention, content filtering, and VPN capabilities.

WiFi Infrastructure - Enterprise-grade wireless access points with centralized management. Consumer routers are not designed for business use and create security gaps.

Critical Business Applications and Services

Productivity Suite - Microsoft 365 or Google Workspace provides email, document collaboration, and communication tools. For most businesses, this is the core of daily operations.

Line-of-Business Applications - Industry-specific software like accounting systems (QuickBooks, Sage), CRM (Salesforce, HubSpot), or practice management software. These may run on-premises, in the cloud, or as SaaS.

Communication and Collaboration - Microsoft Teams, Zoom, or other platforms for internal communication and video conferencing. These have become essential for hybrid work environments.

Security Stack - Endpoint protection, email security, backup systems, and identity management. Security is not optional—it is a fundamental infrastructure requirement.

IT Infrastructure Management Best Practices

Documentation - Maintain current documentation of your IT environment including network diagrams, asset inventory, and configuration records. This is essential for troubleshooting and disaster recovery.

Monitoring and Alerting - Proactive monitoring catches issues before they cause outages. This includes server health, network performance, and security events.

Regular Maintenance - Scheduled updates, patches, and firmware upgrades keep systems secure and performing optimally. Neglected systems become both security risks and reliability problems.

Disaster Recovery Planning - Know how you will recover if critical systems fail. This includes tested backups, documented procedures, and recovery time objectives.

Understanding IT Infrastructure Basics | A Business Guide

The Core Components of IT Infrastructure

On-Premises vs. Cloud Infrastructure

Building a Reliable Network Foundation

Critical Business Applications and Services

IT Infrastructure Management Best Practices

Common Questions About This Topic

How much should a small business spend on IT infrastructure?

Should my small business move everything to the cloud?

How often should we replace IT infrastructure equipment?

Do we need an on-site server or can we go serverless?

Explore More IT Topics

Network Security Checklist

MSP Onboarding Process

MSPs in Orange County

Ready to Discuss Your IT Needs?

Understanding IT Infrastructure Basics | A Business Guide

The Core Components of IT Infrastructure

On-Premises vs. Cloud Infrastructure

Building a Reliable Network Foundation

Critical Business Applications and Services

IT Infrastructure Management Best Practices

Common Questions About This Topic

How much should a small business spend on IT infrastructure?

Should my small business move everything to the cloud?

How often should we replace IT infrastructure equipment?

Do we need an on-site server or can we go serverless?

Explore More IT Topics

Network Security Checklist

MSP Onboarding Process

MSPs in Orange County

Ready to Discuss Your IT Needs?