Microsoft, Dell warn against impulsive budget cuts as recession looms

An abstract image of a magnifying glass over a digital cloud.
(Image credit: Shutterstock/Illus_man)

Microsoft and Dell Technologies have called on businesses to focus on streamlining and optimizing their infrastructure deployments as they seek to curb costs, instead of making drastic technology budget cuts.

In conversation with TechRadar Pro at a recent roundtable event, Dayne Turbitt, SVP and GM at Dell, and Michael Wignall, Microsoft Azure Business Lead, spoke to the need for companies to consider the long-term strategic importance of technology spend.

“The understanding of technology has shifted from being a cost center to a business imperative and that changes the viewpoint on cost,” said Turbitt.

“As for deriving the most value from technology investment, it’s really about auditing your environment. If you’re running assets that are significantly old, you’re both putting your business at risk [from a security perspective] and spending more on electricity.”

Tough times ahead

With governments across the world wrestling to keep inflation under control and grumbles of global recession growing louder, many businesses are set to face a period of considerable economic pressure.

In times of high inflation, the appetite for spending cools off, the cost of borrowing rises and employees begin to demand raises to offset the increase in the cost of living, all of which has an effect on the bottom line.

To help weather the period of turbulence, businesses are scrambling to find ways to cut back on costs. And, naturally, as a large contributor to expenditure, technology budget is among the items under review.

However, according to Microsoft and Dell, sudden cuts to technology spend represent a shortermist approach to solving these problems that could potentially damage a company’s prospects in the long term.

A more sensible solution might be to examine the ways in which a business might shift CapEx to OpEx, by taking advantage of cloud-based services and cloud-like operating models for on-prem infrastructure, thereby preserving all-important liquidity.

Equally important, Wignall told us, is ensuring infrastructure is deployed in such a way as to optimize for productivity and security, two factors that can have a direct impact on the bottom line.

“It’s not just about moving everything to the cloud,” he said. “It’s about doing simple things, like knowing what our estate looks like, and asking how we can monitor and patch it consistently, and make it efficient.”

The consensus - perhaps unsurprisingly, given the nature of the Microsoft-Dell partnership - was that the hybrid cloud model affords the greatest level of choice and flexibility for companies looking to shield themselves from a cost perspective.

“Using our combined technologies to properly audit what’s there, we can encourage customers to turn off or consolidate stuff that’s not needed,” added Wignall. “This has been a practice for a while, but I absolutely expect it to continue in the current environment.”

Joel Khalili
News and Features Editor

Joel Khalili is the News and Features Editor at TechRadar Pro, covering cybersecurity, data privacy, cloud, AI, blockchain, internet infrastructure, 5G, data storage and computing. He's responsible for curating our news content, as well as commissioning and producing features on the technologies that are transforming the way the world does business.