7 IT Cost Reduction Strategies

By: Quentin Fleming | September 12, 2023

The cloud made app development, data management, storage, and computing faster and easier – but now bills are coming due. And they’re not pretty. But we know it doesn’t have to be this way. You can stop the sprawl with CoreStratus – an Azure Cloud Cost Optimization and Financial Governance Solution from Core BTS.

As businesses increasingly rely on technology to operate and grow, IT costs can become a significant portion of their overall budget. However, reducing IT costs doesn’t necessarily mean sacrificing performance or functionality. In this blog, we’ll explore some strategies for reducing IT costs while maintaining the quality of your technology infrastructure.

1. Consolidate and Virtualize Servers

One of the most effective ways to reduce IT costs is to minimize your on-prem footprint. Doing so reduces your power consumption (like cooling servers). Additionally, virtualization can help clean up licensing costs, improve server utilization, and increase the availability and reliability of your applications.

2. Move to the Cloud

Cloud computing can also be an effective way to reduce IT costs. By moving some or all of your applications and infrastructure to the cloud, you can avoid the upfront costs of purchasing and maintaining hardware and software. Additionally, cloud providers typically offer flexible pricing models that allow you to pay only for the resources you use.

For a company like Baisch Engineering, moving their project websites to the cloud helped shorten development time and reduce costs previously spent on maintaining on-premise servers. Baisch partnered with Core BTS to help them deploy their Azure environment, migrate their existing project websites, and prepare the cloud environment to host new projects. To learn more about Baisch’s success with the cloud, read the full case study.

3. Optimize Software Licensing

Many businesses struggle to organize and track their server licenses. Utilizing VMs in the cloud help ensure you’re paying for only what you need. Purchasing monthly perpetual server licenses through a CSP provider (like Core) can also help minimize cost through hybrid-use discounts and organize licensing. By conducting a thorough software audit and optimizing your licensing, you can significantly reduce your software costs. [See how we can help you maximize the value of your Microsoft Licensing]

4. Implement Energy-efficient Practices

Reducing your energy consumption can be an effective way to lower your IT costs. Some energy-efficient practices include using power management settings on your devices, consolidating your data centers, and upgrading to more energy-efficient hardware.

5. Outsource Non-core IT Functions

Consider outsourcing non-core IT functions such as help desk support, network management, managed services, or data center operations to a third-party provider. Outsourcing can help you reduce labor costs, improve service levels, and free up your IT staff to focus on more strategic initiatives.

When the NRP Group first partnered with Core BTS, they were facing limited resources and a time sensitive need to focus on cybersecurity vulnerabilities. Our team was able to act an extension of their IT team, providing them with an increased security posture and helping them maximize their return on their Azure investments. Learn more about NRP’s successful shift from traditional IT operations to an agile operating model in the full case study.

6. Leverage Open-source Software

Open-source software can provide a cost-effective alternative to proprietary software. By using open-source software, you can avoid licensing fees and take advantage of a large community of developers who are continually improving and updating the software.

7. Conduct Regular Technology Assessments

Finally, conducting regular technology assessments can help you identify areas where you can optimize your technology infrastructure and reduce costs. A technology assessment can help you identify underutilized resources, eliminate redundancies, and identify opportunities to implement new technologies that can improve efficiency and reduce costs.

At Core BTS, we did this for an east coast-based financial institution. We took this client through our proprietary COMPASS program – which is designed to help clients map out a strategy to gain control over their Microsoft licensing portfolio and, in the case of this client, prepare them for their transition to the cloud. By streamlining their licenses and strategically planning the implementation of their cloud technologies over a three-year period, we allowed them to gradually incur the cost over time but provided them with nearly 25% savings across the three years.


Reducing IT costs requires a strategic approach that considers both short-term and long-term cost-saving opportunities. By consolidating and virtualizing servers, moving to the cloud, optimizing software licensing, implementing energy-efficient practices, outsourcing non-core IT functions, leveraging open-source software, and conducting regular technology assessments, businesses can achieve significant cost savings while maintaining the quality of their technology infrastructure.

If you want to reduce your IT costs without sacrificing functionality, contact us. Our experts can create a plan for how you can work more efficiently.

Cloud Cost Optimization Checklist

Quentin is a cloud cost optimization specialist on Core's Microsoft Licensing Team. He specializes in helping organizations rightsize their Azure environments to make the most of their cloud investment.

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