How Businesses Are Adapting Hosting Budgets in the Face of AI, Compliance, and Economic Pressure
Rising cybersecurity threats, economic instability, and growing compliance demands are forcing companies to reevaluate their hosting strategies. Liquid Web’s latest study of IT and cybersecurity professionals paints a clear picture: infrastructure isn’t just a technical concern anymore—it’s a financial and strategic one.
The report surveyed leaders from companies of all sizes to understand how businesses are allocating hosting and cybersecurity budgets, responding to AI-driven risks, and managing DevOps operations in an unpredictable environment.
Balancing Budgets Between Hosting and Cybersecurity
On average, companies are spending $64,500 annually on hosting and $44,800 on cybersecurity tools. For smaller businesses, those figures drop, with hosting budgets averaging just $23,100.
But spend alone doesn’t tell the full story. The study reveals a clear rebalancing in priorities. More than half (52%) of all businesses plan to increase their compliance tool budgets this year, with an average bump of $18,600. This reflects growing concern around meeting regulatory requirements while defending against more advanced threats.
One consistent theme: cybersecurity is no longer a secondary consideration in hosting decisions. Tools like firewalls, AI-driven threat detection, DDoS protection, and compliance platforms now top the list of hosting priorities.
AI’s Expanding Role in Infrastructure Optimization
Nearly 9 in 10 businesses (88%) are using automation or AI to optimize their hosting spend. For 42%, AI plays a major role. This isn’t just about efficiency—companies are actively exploring AI-powered systems to analyze resource use, manage workloads, and flag security anomalies in real-time.
Adoption isn’t universal. Smaller firms lag slightly behind, with 81% using automation or AI in some form. However, even these numbers show that AI in hosting has moved from emerging tech to baseline expectation.
Some companies are investing in GPU-powered servers to support AI-based automation, especially in cybersecurity. As threats evolve, automated detection and mitigation offer a way to stay ahead without stretching internal teams thin.
AI-Driven Cybersecurity Threats: A New Priority
While AI helps optimize budgets and operations, it also introduces a growing threat. Two-thirds of businesses identified AI-assisted cyberattacks as their top security concern. These attacks—driven by machine learning and automation—can adapt faster than traditional defenses.
In response, 25% of businesses increased their cybersecurity budgets, dedicating an average of $18,700 specifically toward AI threat detection. The most concerned companies raised their budgets by up to $26,100.
Despite those efforts, a readiness gap remains. Over one-third of businesses (34%) don’t feel prepared to defend against AI-driven attacks. Smaller companies were especially likely to underestimate the risk—only 53% recognized AI-assisted threats as a significant concern.
Economic Pressures Are Forcing Tough Trade-Offs
Economic uncertainty is reshaping hosting decisions across industries. Seven percent of businesses have already cut their hosting budgets for the coming year—by an average of $19,000.
But cost-cutting comes with consequences. One in four businesses that previously reduced hosting spend experienced negative impacts on security or performance. The study points to redundant services, underused resources, and “extra” performance features as primary cut targets. Yet trimming too aggressively can leave systems vulnerable or underpowered.
The findings highlight a tension that’s becoming more familiar: how to maintain performance and security while holding down costs in a shaky economy.
DevOps Models: In-House vs. Managed vs. Freelance
The choice between building an internal DevOps team or outsourcing remains a crucial decision. DevOps—integrating development and IT operations—supports everything from app delivery to incident response. How a business staffs this function affects speed, reliability, and cost.
More than half of companies (55%) stick with in-house DevOps teams. The appeal? Control, customization, and alignment with internal workflows. But this model brings serious hiring challenges. High salary demands, a limited talent pool, and retention difficulties all make DevOps staffing a heavy lift—especially in competitive markets.
Managed DevOps services are gaining traction. About 39% of businesses prefer this route, relying on third-party providers for expertise without the HR headaches. It’s a middle ground that balances flexibility with hands-off convenience.
Freelance DevOps is the least-used model, chosen by just 6% of businesses. Hourly rates vary widely—from $26.34 in India to $82.35 in the U.S.—but low adoption suggests lingering concerns over consistency, availability, and institutional knowledge.
Preparing for What’s Next
The overall takeaway from the research is clear: businesses are leaning into AI, automation, and managed solutions to prepare for rapid technological change and growing threats. Hosting and cybersecurity budgets are shifting in response—not just in size, but in structure and priority.
Companies increasing their compliance and threat detection budgets now will be better positioned for regulatory shifts and advanced threats. Those using AI to analyze infrastructure spending are more likely to stay efficient and competitive. And businesses embracing managed services or modernizing their DevOps strategy may find more room to innovate without adding operational complexity.
Still, gaps remain. Smaller firms are slower to adopt advanced security tools. A third of companies feel unprepared for AI-powered attacks. And budget cuts—though understandable in a tough economy—carry real risks.
