Elon Musk’s Department of Government Efficiency (DOGE) has been making headlines lately—and while the moves are controversial, the core idea of enacting massive efficiency-boosting cuts is nothing new to IT leaders.
Instead of targeting government spending, the real problem for CIOs is in their data centers, cloud environments, and sprawling SaaS portfolios.
There’s a catch, though. While efficiency cuts are a top priority, most IT teams are actually increasing their budgets this year—a paradox that might seem counterintuitive.
In this article, we’ll break down why IT spending is both shrinking and expanding at the same time, and how IT leaders can cut waste in a way that fuels innovation rather than stifles it.
The Case for Cutting: Where IT Waste Is Hiding
One of the biggest cost-cutting areas is cloud spending. While the cloud has been an essential enabler of remote work, AI, and scalable infrastructure, it has also led to rampant overspending. Reports show that over 30% of cloud budgets are wasted on unused or underutilized resources. Many companies have begun optimizing cloud workloads, reducing excess storage and computing power, and even shifting some workloads back on-premises to cut costs.
Beyond cloud inefficiencies, SaaS bloat is another major area where IT leaders are slashing waste. The proliferation of SaaS applications—many of which enter the business without IT’s approval—has led to unchecked spending on tools that are redundant or rarely used. Gartner estimates that as many as 25% of provisioned SaaS licenses are not regularly used by employees.
Compliance and IT asset waste are also on the chopping block. With software vendors increasing the frequency of audits, businesses that fail to track their IT assets effectively risk facing surprise fees. To avoid these costs, many organizations are now enforcing stricter IT asset lifecycle management policies, ensuring they only pay for what they actually use.
The Budget Paradox: Why IT Spending Is Still Growing
As CIOs are looking to cut waste, IT budgets are growing. Global IT spending is expected to increase by 9.8% in 2025, reaching $5.61 trillion. (Our recent market survey came to the same conclusion.)
If companies are slashing costs, why are budgets going up?
The answer lies in prioritization and reallocation. IT leaders aren’t just cutting—they’re spending differently. Money is shifting from bloated SaaS subscriptions and underused cloud infrastructure toward cybersecurity, AI-driven automation, and digital transformation initiatives.
Security is a top priority. With ransom attacks on the rise, companies are increasing their investments in zero-trust security frameworks and AI-driven threat detection.
How to Cut IT Waste Without Undermining IT’s Mission
The best IT leaders aren’t just cutting costs—they’re making IT more efficient, agile, and impactful. Here’s how they’re doing it:
- Gain Centralized Visibility Over IT Spending
One of the biggest reasons IT budgets spiral out of control is because teams lack visibility into what they’re actually spending. Shadow IT, rogue SaaS renewals, and cloud sprawl are impossible to control if they’re not being tracked. A unified platform that provides real-time visibility into IT assets, cloud usage, and software licenses is critical for making data-driven spending decisions.
- Cut Unused and Redundant Tools
Not all SaaS tools are created equal, and many IT teams end up paying for overlapping software that serves the same purpose. Conducting an IT rationalization audit can uncover tools that can be eliminated or consolidated.
- Automate Cost Optimization
AI and automation aren’t just helping with IT operations—they’re improving cost efficiency. IT leaders are leveraging automated cloud cost optimization tools to right-size workloads, track under-utilized services, and avoid over-provisioning.
- Strengthen Security to Avoid Costly Breaches and Audits
Cutting security budgets is a short-term gamble that often costs more in the long run. Instead of reducing security spending, IT leaders should look for ways to consolidate security tools and invest in automated compliance tracking to avoid costly vendor audits. A single security breach or licensing penalty can wipe out any cost savings CIOs manage to create.
- Measure Adoption and Impact of IT Investments
Every IT investment should be measured—not just in terms of cost, but in terms of impact. Are employees using the tools IT is paying for? Are cloud services actually improving efficiency, or are they adding complexity? The best CIOs are tracking adoption metrics and making adjustments based on real-world usage data.
Final Thoughts: Cut Smarter, Not Just Deeper
CIOs don’t need to just “cut costs.” They need to spend better. IT is both a cost center and a driver of business innovation—and balancing those realities is what separates reactive budget cuts from strategic IT leadership.
By eliminating waste in SaaS, cloud, and IT operations while reinvesting in security, automation, and smarter IT management, companies can control costs without killing IT’s impact.
🚀 Want to eliminate IT blind spots and optimize spending? Learn how Block 64 can help CIOs centralize IT visibility, optimize cloud and SaaS costs, and protect IT budgets.
