A recent Gartner survey reveals that three-quarters of Chief Financial Officers globally expect their technology budgets to increase this year, with nearly half anticipating hikes of 10% or more. This rise in spending is attributed to the growing recognition of technology as a strategic enabler amid ongoing digital transformations and increased cybersecurity demands. However, while investment in technology is soaring, CFOs are forecasting a significant decline in staff growth, with expected increases plummeting from 6% in 2025 to just 2% in 2026.
A recent article from SiliconANGLE highlights a critical warning from technology economist Howard Rubin regarding the rising costs of IT budgets amid inflation. While companies are planning to increase their IT spending by an average of 3.1% this year, Rubin points out that inflation in the sector is escalating at a rate of 6.9%, leading to a widening affordability gap. This discrepancy suggests that organizations are not only falling behind but are also failing to effectively translate their technology investments into meaningful business outcomes, as evidenced by a lack of productivity gains despite increased spending. Rubin emphasizes that successful IT management should focus on measurable results rather than simply accounting practices, urging enterprises to adopt a continuous modernization approach to optimize their technology investments.
Western Digital has announced it has exhausted its hard disk drive capacity for the year, as demand surges amid major artificial intelligence deals. During a recent earnings call, CEO Irving Tan revealed that the company is fully booked for 2026, with significant long-term agreements established with several top clients extending into 2028.
Why do we care?
MSPs are caught in a cost-inflation vise across labor, hardware, licensing, and cloud, while clients face negative real IT purchasing power. That’s structural margin compression — and most MSPs haven’t priced for it.
The CFO headline — tech budgets going up — is the dangerous part. Because when CFOs concentrate spending while cutting headcount, they consolidate vendor relationships. The budget increase doesn’t get distributed wider. It gets concentrated in fewer partners. MSPs who aren’t already positioned as strategic in that CFO’s mental model don’t get more wallet share. They get rationalized out.
Western Digital closes the escape hatch. Hardware and infrastructure costs aren’t softening. The cost floor is locked while talent remains scarce.
So the MSP that reads “CFOs are increasing tech budgets” as a green light to ask for a rate increase at renewal — without a documented, CFO-legible outcome story — is walking into a vendor consolidation review. That’s not a lost upsell. That’s a lost client. In this environment, that revenue doesn’t get replaced easily.