If your IT budget has felt “tight” the last couple of years, 2026 is not shaping up to be a relief year. The macro indicators are pointing in one direction: technology spend is still expanding, licensing is getting more expensive, and the cost to deliver reliable, secure IT keeps climbing. For business owners and operations leaders, that typically translates into higher internal IT overhead and higher MSP service rates as providers have to absorb and pass through those upstream costs.
Below is what’s driving the trend—and how to plan (and protect your budget) before 2026 hits.
Global IT spending is still accelerating
Major analyst firms are forecasting continued growth in worldwide IT spend into 2026:
- Gartner forecasts worldwide IT spending will reach $6.08 trillion in 2026, up 9.8% year-over-year.
- IDC also projects IT spending growth of about 10% in 2026 (after a very strong 2025).
When overall IT spending grows at ~10%, it’s rarely because everything got cheaper. It’s typically a mix of:
- expanding requirements (security, compliance, cloud, AI),
- higher consumption (more SaaS, more storage, more endpoints),
- and higher unit costs in key categories.
That environment is exactly where MSP pricing pressure comes from.
Licensing increases are real
Even if your environment is stable, your vendors aren’t. One of the clearest, sourced examples going into 2026:
- Microsoft announced commercial Microsoft 365 pricing updates effective July 1, 2026.
- Reuters reported the change broadly, including increases across multiple business and enterprise plans.
For many Milwaukee-area SMBs, Microsoft 365 is a foundational platform (identity, email, collaboration, security features). When those per-user costs move, it pushes up:
- your direct licensing line item, and/or
- the managed overhead required to administer the platform properly (identity, conditional access, MFA, endpoint policies, backups, etc.).
Bottom line: even “steady-state” IT stacks get more expensive when major vendors reprice core suites.
Managed services demand keeps climbing
Demand growth matters because it affects labor markets, service scope, and pricing power.
Multiple market forecasts show managed services continuing to expand through 2026:
- Research Nester estimates managed services market size around $424.14B in 2026.
- MarketsandMarkets projects growth from $365.33B (2024) to $511.03B (2029) (a multi-year trendline that includes 2026).
As the market expands, MSPs are expected to deliver more than “helpdesk and patches.” Clients increasingly expect:
- stronger security baselines,
- faster response and deeper expertise,
- tighter documentation and compliance readiness,
- and more proactive monitoring and automation.
That shift changes cost structure—and pricing.
AI and data-center investment is raising the baseline cost of “modern IT”
Whether you’re “doing AI” or not, the ecosystem is investing heavily in the infrastructure that supports it. This drives cost pressure across cloud platforms, hosting, and the tools MSPs use.
For example, the Financial Times highlighted projections that hyperscalers could invest hundreds of billions in data infrastructure tied to AI, including substantial spending expected in 2026.
You don’t need to buy GPUs to feel the downstream impacts. These investment cycles often coincide with:
- changing cloud pricing models,
- increased demand for specialized skills,
- and higher costs for the tooling MSPs rely on (monitoring, backup, security, automation).
What this means in plain English for SMB IT budgets in 2026
Most organizations feel cost increases in a few predictable places:
- Per-user licensing and security add-ons rise (Microsoft and others).
- Security expectations expand (insurer questionnaires, contract requirements, vendor risk).
- Labor stays expensive for skilled escalation work (identity, cloud, compliance, incident response).
- Tool sprawl becomes unsustainable, pushing consolidation projects (time + money).
- Reactive environments cost more than standardized, proactively managed ones.
If your IT is currently “held together by heroics,” 2026 is when that model gets brutally expensive.
5 practical moves to reduce 2026 budget shock
1) Lock down your “minimum security baseline”
Standardize identity security, endpoint protections, patching, backups, and admin access policies. The more exceptions you have, the more expensive support becomes.
2) Reduce tool sprawl before renewal season
Every redundant product costs you twice: subscription + management overhead. Consolidation is one of the fastest ways to claw back budget.
3) Get ahead of licensing changes
If Microsoft 365 is core to your business, plan now for July 2026 adjustments—especially if you have seasonal hiring or frequent license churn.
4) Shift from “hourly surprises” to predictable agreements
If you’re still relying on reactive break/fix or loosely defined support, you’re exposed. Predictability is what protects budgets.
5) Treat 2026 as a contract strategy year
Many businesses wait until renewal to negotiate. That’s the worst time. The best time is before vendor pricing and MSP demand tighten further.
Lock in 2025 rates with CDS for a limited time
If you’re planning to make a change in 2026 (or you’re already expecting budget pressure), the smart move is to get ahead of it now.
Centurion Data Systems (CDS) is offering a limited-time option to lock in 2025 managed services rates for qualified Milwaukee-area businesses.
What you get:
- A straightforward review of your current environment and renewal timelines
- A practical scope recommendation (no fluff, no overbuying)
- A 2026-readiness plan that prioritizes cost control and risk reduction
Contact CDS to request the “2025 Rate Lock” review before the offer window closes.
