IT Budget Planning 2027: Small Business Checklist

November 6, 2026 · TSR Solutions

IT Budget Planning for 2027: A Year-End Checklist for Small to Mid Market Businesses

For many businesses, November is budget season. Technology is often the line that surprises people later in the year, and the surprises are usually predictable: a server that reaches end of support, a license renewal at a higher price, or a group of laptops that all age out at once.

Good IT budget planning is mostly about putting known dates on a calendar before they turn into emergencies. Below are the 2027 dates Microsoft has already published, the license changes that will show up at renewal, and a simple checklist for the rest of your IT budget.

The Microsoft Dates That Belong in Your 2027 IT Budget

Microsoft publishes its end of support dates years in advance. When a product reaches end of support, Microsoft stops releasing security updates for it. Here are the dates most likely to matter for a small to mid market business, all from Microsoft’s own lifecycle pages:

A few of these deserve a closer look.

Windows Server 2016 Ends Support on January 12, 2027

This is the big one for 2027. Windows Server 2016 is still running in plenty of server closets, often quietly handling file shares, a line-of-business application, or sign-ins for the office. After January 12, it stops getting security updates.

That date is close. A server replacement or a move to the cloud takes planning: choosing the new platform, migrating data and applications, and testing before the cutover. If you still run Windows Server 2016, the money for that project likely belongs in this year’s budget or the first quarter of next year, not later. Our cloud services page explains the options when a server ages out. Microsoft does sell Extended Security Updates for Windows Server 2016 through Azure Arc, which can buy time for a business-critical application. ESU is a paid bridge, not a plan, so budget for the replacement either way.

SQL Server 2017, which many accounting and industry applications run on, follows on October 12, 2027. Ask your software vendors now which versions they support.

Windows 10 Extended Security Updates Cost More Every Year

Windows 10 reached end of support on October 14, 2025. Businesses that still have Windows 10 PCs can buy Extended Security Updates (ESU), but Microsoft’s pricing is designed to push you toward replacement:

• Year one costs $61 per device through volume licensing.
• The price doubles every year, for a maximum of three years.
• ESU is cumulative. If you join in year two, you also pay for year one.

At Microsoft’s list pricing, that means a business starting ESU now pays for year one and year two together, about $183 per device, for coverage that ends October 12, 2027. For many PCs, that money is better spent on a replacement. Year two of ESU ends October 12, 2027, so those PCs need a plan either way.

Windows 11 Versions Have Dates Too

Windows 11 is not a one-time upgrade. Each yearly version has its own end date. Version 23H2 for Enterprise and Education ends November 10, 2026, and version 25H2 for Home and Pro ends October 12, 2027. Keeping PCs on a supported version is usually a routine update, but older hardware can fall behind, so this belongs on the same calendar.

Microsoft 365 and Licensing Line Items

Licensing changes are easy to miss because they show up at renewal, not when Microsoft announces them.

• Microsoft 365 prices changed July 1, 2026. Business Basic went from $6 to $7 per user per month, and Business Standard went from $12.50 to $14. Business Premium stayed at $22. Existing customers keep their current price until their next renewal, so a 2027 renewal may be the first time you see the increase.
• Copilot needs its own line. Microsoft 365 Copilot Business lists at $21 per user per month. Microsoft is offering it at $18 for existing business customers on purchases made by December 31, 2026, and the promotional price applies to the first year only. Some advanced Copilot features are billed by usage, on top of the license, so budget for usage and set spending limits in the admin center.
• Unused licenses cost money every month. Before renewal, match your license count to your actual staff, and remove licenses left behind by former employees.

If your licensing is a mix of plans, add-ons, and renewal dates nobody remembers, a single renewal calendar solves most of the confusion.

Budget for AI Initiatives, Not Just the License

AI is no longer a side experiment for most small to mid market businesses. Owners and managers are asking what Copilot or similar tools could do for their teams, and vendors are bundling AI into the software you already buy. If 2027 is the year you try it, put the full cost on the budget now, not only the per-user price.

The license is the easy line. Use the Microsoft 365 Copilot Business list and promotional prices in the licensing section above, and set spending limits in the Microsoft 365 admin center before a pilot grows. Those numbers belong next to your other Microsoft 365 renewals. The rest of an AI initiative usually costs more than people expect:

1. Seats and usage. Start with a small pilot group, not the whole company. An annual Copilot commitment locks in cost, and usage-based features can add charges if nobody is watching.
2. Training and change. Budget time for the people who will use the tool every day. A license that sits unused is still a line item.
3. Data readiness. AI tools work from the files, email, and SharePoint libraries your staff already can open. Old “everyone” folders, stale guest access, and cluttered shared drives all become part of what the tool can surface. Cleaning that up is project work, and it belongs on the calendar before a wide rollout.
4. Security, permissions, and governance. Treat access first. Decide who gets the tool, what data it can reach, which prompts or uploads are off limits, and who reviews new AI agents or add-ons. Microsoft’s own guidance is that Copilot follows your existing Microsoft 365 permissions, so fixing permissions is the control that matters most.
5. Ongoing pilot cost. A 30-day trial is not a plan. Keep a monthly line for the pilot seats, usage caps, and a short check-in after the first quarter so you can keep, shrink, or stop the project with clear numbers.

The goal is not to buy every AI feature on the market. It is to fund a controlled pilot with clear owners, clear permissions, and a real cost next to the rest of your IT budget. If you want help scoping that before renewal season, book a free consult.

The Rest of Your IT Budget Planning Checklist

Microsoft dates are only part of the picture. A complete IT budget for a small business usually covers these areas:

1. Hardware refresh. List every laptop, desktop, server, firewall, and switch with its age and warranty end date. Replace a share of devices every year instead of all at once. Our hardware team helps plan refreshes so they are planned, not panicked.
2. Security. Budget for the tools and the people behind them: MFA, endpoint protection, email security, monitoring, and security awareness training. If your cyber insurance renews in 2027, check whether the carrier has added requirements. Our cybersecurity services cover each layer.
3. Backup and recovery. Include the cost of backups that cannot be deleted by an attacker, and time to test a real restore. See our disaster recovery services.
4. Projects. Office moves, new locations, new hires, and new applications all have technology costs. Put them on the calendar by quarter.
5. Support. Whether you use fully managed IT support or co-managed IT alongside your own IT staff, a predictable monthly cost is easier to budget than paying by the hour when something breaks.
6. A small contingency. Something will come up. A modest reserve keeps a surprise from becoming a crisis.
7. AI initiatives. Licenses, training, data cleanup, and permissions work before anyone turns a tool on. See the AI section above.

How to Build the Budget in Four Steps

1. Take inventory. You cannot budget for what you have not listed. Start with devices, servers, software, licenses, and renewal dates.
2. Map the dates by quarter. Put every end of support date, renewal, and warranty expiration on a calendar for the next 12 to 24 months.
3. Price the work. Attach a cost to each item, and decide what to replace, what to move to the cloud, and what to retire.
4. Review it every quarter. A budget is a plan, and plans change. A quarterly check keeps it accurate. For a broader yearly review, see why your business technology needs an annual physical.

This is the work a vCIO does: refresh cycles, renewals, and projects mapped by quarter so finance can plan ahead. If you do not know where to start, an IT and security assessment gives you the inventory and a written list of what needs attention.

IT Budget Planning Help in Wisconsin, Texas, Arizona, and Beyond

Since 1991, TSR Solutions has helped small to mid market businesses keep their technology secure, supported, and running. TSR is family owned and operated, meaning we answer to the best interest of our clients, not investors.

Whether you need managed IT services in Milwaukee, IT support in Madison, IT support in Phoenix and Scottsdale, or IT support in San Antonio and Austin, we can help you:

• See what is coming. A technology roadmap and IT budget with every end of support date and renewal on it.
• Retire old servers on your schedule. Windows Server 2016 replacements and cloud moves planned before the deadline.
• Stop paying for what you do not use. License reviews before renewal, not after.
• Reach a technician fast. 3.5 minutes average to a technician who can begin solving your problem, from our U.S.-based team.

Frequently Asked Questions

How much should a small business budget for IT? There is no single right number. It depends on your headcount, how old your equipment is, your security and compliance needs, and how much you rely on technology to serve customers. The most reliable method is to start from an inventory of what you have, add the known dates and renewals, and build up from there.

When does Windows Server 2016 reach end of life? Microsoft ends support for Windows Server 2016 on January 12, 2027. After that date it no longer receives security updates unless you pay for Extended Security Updates, which Microsoft offers through Azure Arc as a temporary bridge. Plan and budget for a replacement or a cloud move either way.

How much do Windows 10 Extended Security Updates cost for a business? Through volume licensing, year one costs $61 per device. The price doubles each year for up to three years, and the program is cumulative, so joining in year two means paying for year one as well.

What is included in an IT budget? Most IT budgets cover hardware refresh, software and licenses, security, backup and recovery, support, planned projects, and a small contingency.

What should be on an IT budget planning checklist? Start with an inventory of devices, servers, software, and licenses. Then add every end of support date and renewal by quarter, hardware refresh, security tools and training, backup and restore testing, planned projects, support costs, and a small contingency.

Should we pay for Windows 10 Extended Security Updates or replace the PCs? For most business PCs, replacement is the better use of money. ESU costs $61 per device in year one through volume licensing, doubles each year, and is cumulative, and it only delays the move to Windows 11. ESU can make sense for a few PCs that run an application that cannot move yet.

When does year two of Windows 10 Extended Security Updates end? Year two ends October 12, 2027. ESU for businesses runs for a maximum of three years after Windows 10 end of support.

Did Microsoft 365 prices go up in 2026? Yes, for some plans. On July 1, 2026, Business Basic went from $6 to $7 per user per month and Business Standard went from $12.50 to $14, while Business Premium stayed at $22. Existing customers see the new price at their next renewal.

What should a small business budget for an AI initiative? More than the license. Plan for a small set of seats or usage, training for the people who will use the tool, cleanup of file and SharePoint permissions, a security and governance review before rollout, and a monthly line to keep or stop the pilot after the first quarter. The per-user Copilot price is only one part of the total.

How often should we review our IT budget? Review it every quarter. Dates, renewals, and staffing change during the year, and a quarterly check keeps the plan accurate without a full rebuild.

The Bottom Line

Most IT budget surprises are dates that were published years ago. Put Windows Server 2016, Windows 10 ESU, Windows 11 versions, your Microsoft 365 renewals, and any AI pilot on one calendar, add your hardware and security plans, and 2027 gets a lot more predictable.

Book a free consult with TSR Solutions, or email info@tsrsolutions.com.