How Technology Budgets Will Evolve in 2026 for SMBs and Enterprises

By Zack Huhn, for the Enterprise Technology Association (ETA)

As we look ahead to 2026, technology budgets across small and mid-sized businesses and large enterprises are shifting in significant and strategic ways. Economic pressures, rapid AI adoption, cybersecurity concerns, and the ongoing demand for digital transformation are reshaping the priorities of CIOs, CTOs, and technology leaders nationwide.

We’ve gathered insights from our network of industry experts, research partners, and advisory members to forecast how tech budgets are evolving in the year ahead. Here’s what business and technology leaders should prepare for in 2026.

AI and Automation Move from Exploration to Execution

In 2026, AI and automation will no longer be experimental initiatives—they will be mission-critical. For SMBs, the focus is on practical, cost-effective automation that saves time and boosts productivity. AI-powered tools for customer service, marketing, sales support, and internal workflows are expected to dominate spending. These include platforms like Microsoft Copilot, Notion AI, and vertical SaaS solutions enhanced by generative AI.

For enterprises, AI investments are moving toward more advanced deployments, including custom-trained large language models, internal AI agent frameworks, and dedicated AI Centers of Excellence. Fine-tuning models, governance frameworks, and data readiness strategies are now essential components of the IT budget.

Many organizations will see their AI-related expenses jump from 5–8% of the total IT budget to as high as 20–25%.

Cybersecurity: No Longer Optional

Cybersecurity remains a top concern for organizations of all sizes, but the approach is becoming more sophisticated in 2026. SMBs are increasingly turning to managed security providers and cybersecurity-as-a-service models to ensure round-the-clock protection. Endpoint detection, phishing defense, identity management, and backup/disaster recovery will be core areas of investment.

For enterprises, cybersecurity budgets will continue to grow—projected at over 14% year-over-year, according to Gartner. The focus will be on Zero Trust architecture, AI-enhanced threat detection, incident response automation, and tools to ensure compliance with national and global regulatory standards.

Cloud Optimization Becomes a Priority

While cloud adoption continues to rise, so do concerns about overspending. In 2026, many companies are shifting their cloud strategy from expansion to optimization.

SMBs are expected to reevaluate their cloud spend and eliminate redundancies, often turning to more integrated platforms. Enterprises are adopting FinOps practices to bring finance and IT together in governing cloud costs, ensuring that every workload is optimized for performance and price.

Dedicated tools for cloud cost visibility, budgeting, and usage analytics are becoming standard in enterprise IT stacks.

Software Rationalization and Vendor Consolidation

One of the most noticeable shifts in 2026 budgets will be the consolidation of software vendors. Both SMBs and enterprises are realizing the hidden costs of overlapping tools and underused licenses.

There is a growing preference for platforms that offer broad capabilities across multiple business functions, rather than disconnected point solutions. Expect organizations to negotiate deeper contracts with fewer vendors, saving money while improving workflow efficiency.

AI-Readiness and Workforce Enablement

AI isn’t just changing the tools we use—it’s changing how people work. That means organizations need to invest in employee training, AI literacy, and change management. In 2026, more tech budgets will include dedicated funds for internal enablement: workshops, learning platforms, prompt engineering certifications, and AI usage policies.

This is especially important as departments like marketing, HR, and finance increasingly purchase and deploy their own AI tools. IT leaders will need to support this decentralization with consistent strategy and guardrails.

Infrastructure Investment: Targeted and Strategic

Hardware refreshes and traditional IT infrastructure spending are slowing, but smart investment continues. With the rise of hybrid work and edge computing, companies are investing in scalable and secure networks, device management, and tools that enable operational resilience.

Expect continued spend in support of remote collaboration, mobile device security, and integration between physical and digital systems.

Decentralized Budget Ownership and Greater Accountability

Another major trend: technology budget ownership is becoming more decentralized. As business units drive more of their own technology adoption, CIOs are taking on a more strategic and consultative role—helping teams choose the right tools, vet vendors, and implement solutions in line with enterprise goals.

With this decentralization comes greater scrutiny. Every dollar allocated to technology in 2026 will be judged by ROI, time-to-value, and measurable impact.

Expect to see an increase in pilot program budgets and proof-of-concept testing before full-scale investments are approved.

Strategic Recommendations for 2026

For SMBs

Focus on solutions that deliver immediate value: automate workflows, secure your operations, and consolidate software where possible. Leverage vendor partnerships and managed services to maximize capabilities without overextending your internal team.

For Enterprises

Prioritize scalable AI deployments, internal governance, and enabling your workforce. Build the infrastructure, culture, and capabilities necessary to sustain innovation. Create cross-functional frameworks to manage cloud, cybersecurity, and decentralized tech spending strategically.

Technology budgets in 2026 will reflect a broader evolution in how businesses operate. They are becoming smarter, more aligned with outcomes, and deeply influenced by the rise of AI and digital intelligence.

At the Enterprise Technology Association, we’ll continue to guide members through this shift—offering insights, events, and opportunities to stay ahead.

To join our network of business and technology leaders, sign up here.

If you’d like to explore how ETA Advisors can help your organization navigate budgeting, vendor selection, and digital transformation, get in touch today.