TL;DR: IDC cut its 2025 IT spending growth forecast in half (10% to 5%) on tariff impact, while American Action Forum estimates direct tariff costs to US small businesses at roughly $85 billion annually, potentially reaching $100 billion. Hardware (laptops, servers, GPUs, networking gear) is hit first; software pricing follows as vendors pass through infrastructure costs. NC small businesses can absorb 15 to 30% of the impact through smarter sourcing, cloud-vs-onprem rebalancing, and managed services consolidation.
Need help optimizing your IT budget? Preferred Data Corporation has helped NC businesses navigate cost pressure since 1987. Call (336) 886-3282 or request a vCIO budget review.
How are tariffs actually affecting small business IT spending in 2026?
Tariffs have raised the landed cost of IT hardware roughly 10 to 30% across categories, depending on origin country and product type. According to TechTarget and IDC, the highest exposure categories for SMB budgets are:
| IT Category | Tariff Exposure | 2025-2026 Price Movement |
|---|---|---|
| Laptops and desktops | High | +12% to +25% |
| Servers and storage | High | +10% to +20% |
| Networking (switches, firewalls, APs) | High | +15% to +28% |
| GPUs and AI accelerators | Very High | +20% to +40% |
| Mobile devices and tablets | High | +10% to +18% |
| Software subscriptions (M365, SaaS) | Medium (lagged) | +3% to +8% in 2026, more in 2027 |
| Managed services labor | Low | Tracks general inflation, +3% to +5% |
The downstream economic effects, summarized by PwC's tariff guidance, are also material:
- US GDP growth projected to fall from 2.8% (2024) to 1.5% (2026)
- Global GDP growth from 3.3% (2024) to 2.9% (2026)
- IDC's IT spending growth forecast cut from 10% to 5% in 2025
- Datacenter construction costs facing the steepest hardware-driven increases
Key takeaway: Hardware-heavy IT projects deferred from 2024 are now noticeably more expensive in 2026. Cloud, managed services, and software-driven projects are largely protected for the moment but will see catch-up pricing in 2027 contract renewals.
What is the actual cost impact for an NC small business?
A 50-person NC manufacturer or professional services firm should plan for a $15,000 to $80,000 annual IT cost increase from tariff pass-through alone, before counting normal inflation, AI workload growth, or compliance investments.
A representative cost stack for a 50-employee NC SMB:
| Spend Category | 2024 Annual | 2026 Annual (with tariffs) | Increase |
|---|---|---|---|
| PC refresh (~15 units/year) | $22,500 | $27,500 | +$5,000 |
| Server / storage refresh (3-yr cycle, prorated) | $12,000 | $14,500 | +$2,500 |
| Networking refresh (5-yr cycle, prorated) | $5,000 | $6,500 | +$1,500 |
| M365 / SaaS (50 users) | $36,000 | $39,500 | +$3,500 |
| Cybersecurity tools (EDR, MFA, SIEM) | $24,000 | $25,500 | +$1,500 |
| Managed IT / co-managed services | $90,000 | $95,000 | +$5,000 |
| Consumables, peripherals, mobility | $8,000 | $10,500 | +$2,500 |
| Total IT spend | $197,500 | $219,000 | +$21,500 |
That's roughly an 11% increase in annual IT costs - higher than the 5 to 7% inflation many SMBs budgeted for in 2024. According to Small Business Majority, 65% of small businesses responded to rising costs by raising prices, 37% delayed business investments, 20% froze hiring, and 8% laid off employees.
Read our managed IT services overview →
How can NC small businesses absorb the impact without sacrificing security?
Through targeted shifts in sourcing, lifecycle, and vendor consolidation. The five highest-leverage moves available to an NC small business in 2026:
1. Shift hardware-heavy projects to cloud where economics support it
Cloud workloads use the cloud provider's already-amortized hardware and benefit from their scale and tariff offsets. For workloads that are seasonal, growing, or compute-light, moving to cloud often beats on-prem cost over a 3-year horizon. The math reverses for steady, high-throughput workloads like manufacturing PLM, ERP, or ML training - those should stay on-prem when possible.
| Workload Type | Cloud Lean | On-Prem Lean |
|---|---|---|
| Email and collaboration | ✅ Cloud (M365) | |
| File storage (general) | ✅ Cloud or hybrid | |
| ERP (manufacturing, distribution) | ✅ On-prem or private cloud | |
| AI training and inference (steady-state) | ✅ On-prem GPU | |
| AI inference (variable load) | ✅ Cloud GPU rental | |
| Backup and DR | ✅ Cloud or hybrid | |
| Surveillance video | ✅ On-prem NVR |
2. Extend hardware lifecycles strategically
A 3-year PC lifecycle is conventional but no longer mandatory. Many NC SMBs can extend laptops to 4 years and desktops to 5 years without reliability issues if they invest in solid-state drives, manage warranty service, and replace batteries as needed. The savings on a 50-employee fleet: $12,000 to $20,000 over a 5-year cycle. The catch: extended lifecycles must be paired with endpoint detection and response to compensate for older firmware.
3. Consolidate vendors and managed services
The average SMB has 5 to 9 IT vendors (helpdesk, MSP, cybersecurity, M365, networking, voice, backup, etc.). Consolidating to 2 or 3 strategic partners typically cuts 8 to 15% of total IT cost while improving incident response time. The trade-off: vendor lock-in becomes a real consideration, so consolidation must include exit clauses and data portability requirements.
Read our technology vendor management guide →
4. Move from CapEx to OpEx for hardware
Hardware-as-a-service (HaaS), Device-as-a-Service (DaaS), and managed PC programs convert one-time purchases into monthly subscriptions, often with 1 to 5% built-in price escalators that are typically below tariff-driven CapEx increases. The right answer depends on cash flow preference and tax strategy; an NC business with strong cash flow may still prefer CapEx for the depreciation, while one prioritizing predictability benefits from OpEx.
5. Audit licensing and shadow IT
Most NC SMBs are paying for 10 to 25% more SaaS seats than they actively use. A quarterly licensing audit recovers $5,000 to $40,000 annually for a 50-employee business. Shadow IT (unsanctioned SaaS, AI subscriptions, employee credit card software) inflates the number further while creating compliance risk.
Should NC manufacturers pull tech projects forward or push them back?
Forward-shift hardware-heavy and tariff-exposed projects, push back software and cloud projects. The reasoning:
| Project Type | 2026 Recommendation | Reasoning |
|---|---|---|
| Server refresh | Pull forward to Q3 2026 | Server tariffs likely to escalate further |
| AI infrastructure (GPU) | Pull forward if budget allows | GPU tariffs at the high end of impact range |
| PC refresh | Hold cycle, extend lifecycle | Wait for next-gen Windows-on-ARM or refresh deals |
| Network refresh | Pull forward Wi-Fi 7 / SD-WAN if needed | Networking gear tariffs remain elevated |
| Cloud migrations | Steady pace | Cloud insulates from hardware tariff cycle |
| SaaS rationalization | Q2-Q3 2026 | Renewals are when leverage exists |
| Cybersecurity hardening | Continuous priority | 88% of SMB breaches involve ransomware; unrelated to tariffs |
| Compliance projects (CMMC, HIPAA) | Continuous priority | Phase 2 deadline is November 10, 2026 |
Key takeaway: Don't defer cybersecurity or compliance to "save money" on tariffs. The cost of one ransomware incident or compliance failure dwarfs any tariff impact, and both classes of risk are accelerating in 2026.
What does the tariff environment mean for managed IT pricing?
Managed services pricing is more stable than hardware pricing, but expect 3 to 5% annual increases in 2026 versus the historical 1 to 3%. According to Channel Insider and CIO, managed service providers (MSPs) are absorbing some hardware cost in their fixed-price models for now, but renewal cycles in 2026 and 2027 will likely include catch-up pricing.
For NC small businesses evaluating managed IT contracts in 2026:
- Ask for hardware cost pass-through clauses to be transparent (and capped if possible)
- Negotiate 2 to 3-year contracts with explicit renewal pricing rather than unilateral MSP increases
- Validate that the MSP's labor pool is US-based; offshore-heavy MSPs face their own currency and trade pressure
- Get exit clauses and data portability terms in writing
Read our managed IT services overview →
How should NC manufacturers handle the tariff-cybersecurity trade-off?
Don't trade them. Treat cybersecurity as a non-negotiable line item that grows with risk, and find tariff savings elsewhere in the IT budget. According to Voice of Main Street research, tariff-related cost challenges are most prevalent in manufacturing (62%), and manufacturing also faces the most aggressive ransomware threat environment.
The principle: Tariff savings should come from PCs, peripherals, networking refresh timing, and SaaS rationalization. They should not come from EDR, backup, MFA, monitoring, or CMMC compliance work. The math works in only one direction: a $20,000 EDR program is cheaper than a $200,000 ransomware recovery.
Read our manufacturing cybersecurity services →
How does PDC help NC businesses optimize IT costs in 2026?
Preferred Data Corporation provides vCIO services, managed IT, and hardware procurement for NC small businesses navigating cost pressure. We help NC clients build 3-year IT budgets, evaluate cloud-vs-on-prem economics workload by workload, audit SaaS licensing, and time refresh cycles to minimize tariff exposure. As a local NC partner since 1987, we have the buying relationships and vendor leverage that distant national MSPs lack.
We are not in the business of cutting corners on cybersecurity to make budgets work. We are in the business of finding $20,000 of waste in places clients did not know to look so we can fund the security investments that actually matter.
Schedule a vCIO IT budget review:
- Call (336) 886-3282
- Visit preferreddata.com/contact
- Email [email protected]
Frequently Asked Questions
Will tariffs continue to affect IT pricing through 2027?
Most analysts expect tariff impacts to be fully baked into pricing through 2027 with possible additional movement depending on policy. PwC and IDC suggest the second-order effects (software pricing increases as vendors pass through their own infrastructure costs) appear in 2026 contract renewals and accelerate in 2027.
Should we just buy everything now to lock in 2025 pricing?
No. Pulling forward purchases creates inventory carrying costs, accelerates depreciation, and forces tech decisions before requirements are clear. The smart approach is selective acceleration: pull forward hardware that you have already decided to buy in 2026, leave optional projects on their original schedule, and protect cash for cybersecurity and compliance work that cannot wait.
Are tariffs accelerating cloud migration?
For some workloads, yes. Cloud insulates SMBs from the worst of the hardware tariff impact because the cloud provider already owns and operates the hardware. However, cloud is not always cheaper - steady-state, predictable workloads can be more expensive in cloud over 3 years than on-prem. PwC notes the right answer requires workload-by-workload analysis, not blanket migration.
Does this affect cybersecurity tool pricing?
Modestly. EDR, SIEM, and managed security tools are largely cloud-delivered and labor-intensive, which insulates them from hardware tariff impact. Expect 3 to 6% annual increases on cybersecurity tools rather than the 10 to 30% on hardware. This is one more reason cybersecurity should not be the first place to cut.
Should we negotiate harder with our IT vendors?
Yes, but strategically. Vendors absorb early tariff impact to retain customers, but renewal pricing increasingly reflects the new cost reality. Use 2026 renewals to negotiate multi-year terms with capped escalators, vendor consolidation discounts, and data portability clauses. Avoid pushing for unsustainable rates that get clawed back at renewal.