Firms waste millions with inflexible IT choices

The average British business is wasting hundreds of pounds a year as a result of using inflexible options for IT services such as Internet, email, and back-up, according to research commissioned by 1&1 Internet Ltd,, a global leader amongst web hosting providers.  The data from over 750 small and medium sized companies shows that most pay for IT services based on a rough and often outdated calculation of maximum requirements rather than factoring in actual usage including quieter periods. The average owner admits that seasonally quieter months should equate to at least a 12 per cent reduction in their spend, meaning a £432 saving for a firm with average costs.  1&1 advises businesses to be aware of scalable ‘cloud-based’ options for which costs are more aligned with business performance.

1&1’s ‘IT Purchasing Survey’(1) of 756 UK small and medium sized companies finds that many are not looking into their on-going IT service costs as rigorously as they should.  The average firm spends £3597 per year on on-going IT services including Internet access, email, server costs, data transfer and electronic storage.  The data shows that many do not have IT costs proportionate to their business performance.  Over one third of companies (34 per cent) admit that they pay the same annual total regardless of whether the business is busy or not.  Worryingly, this increases to 40 per cent for the smallest businesses with less than 10 employees.  Only 11 per cent of firms were certain that their IT costs were sufficiently in line with fluctuations in business performance.

Given the facility to adjust IT service costs in line with their actual usage during quieter periods in the year, the average business owner estimates a 12 per cent saving should be possible, meaning an average saving of £432.  For 1 in 3 businesses, the business owner has sole responsibility for researching and procuring IT services.  The data reveals that only 17 per cent of companies have already looked into whether IT services, such as server capacity, could be reduced down for quieter periods to be in line with actual requirements.  A further 28 per cent report that they would be keen to make their IT costs more in line with seasonal variations in usage.
Oliver Mauss, CEO 1&1 Internet Ltd., said “Every business has the challenge of ensuring that IT spend drives value back into the business.  Even the smallest firms should explore technologies that scale and adapt to their business goals and performance.  Hosted solutions such as Cloud servers are a good example of how firms can leverage full performance but only pay for the resources they need, when they really need them”.

New research from the Cloud Industry Forum (CIF), an independent body that provides advice on applying Cloud-based services, finds that the UK market for Cloud services is growing rapidly.  A study of 250 IT decision makers across all types of UK organisation, finds a 27 per cent rise in first time users over the past 18 months.  Based on these results, CIF expects more than 75 per cent of UK businesses to be using at least one cloud service formally by the end of 2013.  The body also expects 80 per cent of current Cloud users to have increased their Cloud spend in the same timeframe.

An example of a Cloud-based IT service that can flex to business requirements is the 1&1 Dynamic Cloud Server (DCS), from £29.99/month+VAT.  Configurations for all essential features such as CPU or RAM can be scaled up or down and are charged on an hourly basis as needed.  For small businesses, this means server costs can be managed far more closely and efficiently.  For example, if a promotional campaign or one-time project attracts more website visitors than usual, the performance parameters can be increased by the user with the help of an intuitive slider.  An upgrade or downgrade to a DCS can be applied in less than five minutes.  1&1 also provides mobile apps so a business owner can manage and monitor server resources at any time on-the-go.

Mauss added, “For a small business owner, Cloud server packages offer the possibility to not only reduce total costs but also manage their IT needs just as responsively and efficiently as much larger corporations”.

As a global leader among web hosts, 1&1 is well placed to deliver a high quality service to its customers. The company currently holds over 11 million customer contracts worldwide and manages 11 million domain names.  For more information visit the website at

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