Your 2027 IT Budget Is Built on Prices That No Longer Exist

It's budget season. In most of the mid-market companies I talk to, the 2027 IT budget is being built the way it's always been built: take last year's actuals, add a few percent, and argue about the projects at the bottom of the list.

That approach has two blind spots. It doesn't look far enough ahead at what's coming off support, and it assumes prices that have already changed. After 25+ years on both sides of the budget table, I've learned that the first blind spot is the one that puts the business at risk.

The Most Common Gap: No One Checked What's Coming Off Support

This year I worked with three companies that were all late on Windows 10. In each case the Windows 11 upgrade never made it into the annual operating plan (AOP). When leadership finally recognized it had to happen, the project was shoehorned into a PMO that was already fully committed, and other priorities slipped to make room.

Windows 10 wasn't the only one:

• •Microsoft Project Online retired on September 30, 2026. Leaders didn't see it coming, and companies had to stand up on-premises environments to keep their project data and processes running. We delivered one of those projects before the deadline. Two other companies hadn't even started.
• •A cloud application that wasn't FedRAMP compliant. One company only discovered the gap while preparing for a CMMC audit. Hundreds of millions of dollars in revenue were at risk, and they came close to finding out too late.

I've now seen this same pattern at multiple companies. It isn't a technology problem. It's a planning problem: end-of-support and compliance deadlines are known years in advance, yet they keep getting left out of the plan. (If you run SAP ECC, the same applies to its 2027 end of mainstream support.)

Make End-of-Support the First Step of the AOP

Before anyone debates new initiatives, CIOs and IT leaders should answer one question: what in our environment is coming off support or falling out of compliance in the next 24 months?

• •Inventory every platform: operating systems, servers, databases, ERP and SaaS applications, and the tools your teams use every day.
• •Map vendor support dates and any compliance requirements tied to your contracts (FedRAMP, CMMC, HIPAA, PCI).
• •Fund these first. They aren't optional projects. They're the cost of staying in business.
• •Reserve PMO capacity for them so they don't crowd out strategic work mid-year.

Then Re-Price the Budget: Three Price Shocks at Once

Once the must-do list is set, check the prices underneath it.

• •Hardware is getting more expensive. Gartner's new forecast, released this week, says memory prices have more than doubled in 12 months because of AI data center demand. PCs, servers and storage are following, and Gartner expects it to last through 2027.
• •Windows 10 just got twice as expensive to keep. Commercial Extended Security Updates went from $61 to $122 per device on October 14, and year three is $244. ESU is a bridge, not a plan. Set an exit date.
• •Software and AI keep creeping up. Microsoft 365 list prices rose again on July 1, and today's AI pricing is subsidized. Gartner's chief forecaster says it won't be this low again.

Build the Budget in Three Lines

• •Run: every contract, license and device, re-priced at current rates, with an owner and a renewal date.
• •Grow: the strategic initiatives, kept separate so price increases can't quietly eat them.
• •Price risk: a reserve for hardware, cloud and AI usage, which now behave like variable costs. Model AI at two to three times today's rates before scaling a use case, and give every AI line item clear stop criteria.

What to Do Next: A 2027 Budget Checklist

• ☐List every platform reaching end of support in the next 24 months
• ☐Confirm compliance requirements in your customer contracts (FedRAMP, CMMC and others)
• ☐Fund and staff the end-of-support projects first, with PMO capacity reserved
• ☐Choose an exit path for every remaining Windows 10 device
• ☐Re-price every 2027 renewal at current or announced rates
• ☐Split the budget into run, grow and price-risk lines
• ☐Review the budget quarterly; prices are moving too fast for an annual one

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