Are You Paying Too Much for IT? How Hosted Solutions Cut Long‑Term Costs
- SystemsCloud
- Nov 13
- 4 min read
Many UK companies spend far more on IT than they realise. Salaries, on‑site servers, callouts and unplanned outages all add up. Hosted desktops and managed IT shift these costs into a predictable service that is easier to run and easier to secure.
Below is a plain‑English guide to the real cost of “keeping IT in‑house”, and why a hosted model often wins over three years or more.
What Costs Hide Inside “Local IT”?
Local IT usually means on‑site servers, a small internal team, and vendors paid to fix issues. The headline figures are staff and hardware. The hidden items are the expensive ones.
Typical cost drivers:
Salaries and overheads for IT staff
Server refreshes and storage
Software, security and backup tools
Break‑fix and maintenance contracts
Energy and office space for the server room
Lost time when systems slow down or fail
These costs do not move together. They often rise when the business grows, changes office, or adds new systems.
Related reading: Why Local IT Is Holding Businesses Back (And How Virtual Desktops Solve It), Why IT Shouldn’t Be an Afterthought: Building Tech into Your Growth Plans.
How Do Hosted Desktops and Managed IT Change the Cost Curve?
Hosted desktops move your Windows desktop into a secure UK data centre. Staff sign in from any device. Files and apps live in one controlled place. Managed IT keeps that environment patched, monitored and backed up.
Results that matter to non‑technical teams:
One monthly fee that replaces many small unpredictable bills
Consistent performance for every user
Data held centrally rather than on laptops
Fast recovery if a device is lost or fails
Security policies applied to everyone at once
Why Do Salaries and Overheads Outgrow Subscription Fees?
IT salaries rise with responsibility and scarcity. A single hire rarely covers all needs. A realistic setup often includes an IT manager, a systems engineer and a support technician. Add national insurance, pensions, training and recruitment. Add holiday cover and sick leave. The true figure is far higher than the listed salary.
Hosted models pool specialist skills across many clients. The service spreads 24x7 monitoring, security expertise and licensing across a wider base. The result is a lower unit cost per user, especially once the team passes 25 to 50 staff.
What Does a Three‑Year Cost Model Look Like?
The figures below are an illustrative model for a 50‑person SME in the UK. Endpoint devices and Microsoft 365 licences are similar in both approaches, so they are excluded for fairness.
Cost item (annual) | In‑house IT | Hosted desktops + managed IT |
IT staffing, 3 roles plus 25% overhead | £156,250 | £22,500 (IT coordinator, 0.5 FTE) |
Recruitment and training | £10,000 | £0 to £2,000 included in service |
Server and storage, amortised | £5,000 | £0 |
Security, backup, server software | £12,000 | Included in service |
Maintenance contracts and callouts | £8,000 | Included in service |
Energy and space | £4,000 | £500 |
Productivity loss from outages and slowdowns | £9,000 | £4,000 |
Hosted desktop subscription (50 users at £85 per month) | £0 | £51,000 |
Managed IT service | £0 | £24,000 |
Estimated total per year | £204,250 | £102,000 |
Three‑year view
In‑house: about £612,750
Hosted: about £326,000 including a one‑off migration of £20,000
Indicative saving over three years: about £286,000
Assumptions vary by sector and tooling. The pattern holds in most SME settings because staffing and unplanned events dominate the in‑house total.
How Does This Help Non‑Technical Directors Make a Decision?
Think in outcomes rather than acronyms.
Cost predictability. One service fee replaces many fragmented bills.
Control. Users work inside one managed environment rather than many local machines.
Resilience. Backups, patching and security controls sit in one place.
Simplicity for staff. Same desktop at home, in the office, or on client sites.
Easier audits. Access and logging are consistent across the team.
If an option makes outages rarer and recovery faster, it protects revenue and reputation.
What Is the Practical Path From Local IT to Hosted?
A structured move reduces risk and keeps staff productive.
Map your applications and data, then rank them by business impact.
Pilot a department with hosted desktops for four weeks. Measure login times, ticket volume and user feedback.
Migrate shared data, then line‑of‑business apps, then the wider team.
Retire on‑site servers once backups and verification pass.
Review monthly reports on performance, security and service levels.
This path avoids a big‑bang change and creates early value.
Where Do Savings Usually Show Up First?
Fewer tickets for slow machines and profile issues
Faster new‑starter onboarding
Lower spend on callouts and emergency projects
Reduced exposure to ransomware and device loss
Fewer hours spent chasing vague IT problems
Finance teams see the change in predictability. Managers see the change in staff time. Users see the change in day‑to‑day reliability.
When Are You Overpaying For IT?
You are overpaying when spend is high, outcomes are weak, and unplanned work keeps returning. Hosted desktops and managed IT replace scattered costs with one controlled service that scales with headcount. Over three years the savings often fund other priorities, from training to customer experience.