On this page
Key points#
- An 8% IT spend ratio at a B2B SaaS company might be lean.
- Average time to realize 80% of identified savings opportunities post-close.
- "The benchmark isn't just 'how much is normal', it's 'how much is this company getting in value for what they're spending.' A portfolio company at $3,200/employee for software could be efficient or wasteful depending entirely on what they're running and whether it's priced to market.".
Why IT Spend Benchmarks Differ Dramatically by Industry#
IT spend ratios vary by 4 to 5× across industries, and within industries, by company stage, business model, and technology architecture. A financial services firm running complex trading infrastructure looks completely different from a regional insurance broker. A cloud-native SaaS business looks nothing like a traditional software company with on-premise deployments. Applying the wrong benchmark to a portfolio company produces misleading conclusions.
The primary drivers of IT spend variation across portfolio companies:
- Business model cloud-native companies spend 3 to 5× more on infrastructure per employee than traditional businesses
- Industry regulatory burden financial services and healthcare carry significantly higher compliance-related IT costs
- Automation intensity companies with high automation (RPA, workflow tools, integration platforms) often run higher IT costs but lower overall labor costs
- Geographic footprint multi-region deployments multiply infrastructure costs; APAC expansion particularly expensive
- M&A history recently acquired companies often carry technology debt from prior acquisitions, inflating costs 15 to 30% above steady-state
- Employee seniority mix engineering-heavy companies need premium tooling that drives higher per-employee IT spend
IT Spend Benchmarks by Industry: Detailed Data#
| Industry | IT Spend % Revenue | Software % Revenue | Cloud % IT Spend | $/Employee/Year (Total IT) |
|---|---|---|---|---|
| B2B SaaS / Software | 10 to 18% | 4 to 8% | 55 to 75% | $8,000 to $18,000 |
| FinTech / Financial Software | 12 to 20% | 5 to 9% | 50 to 65% | $10,000 to $22,000 |
| Financial Services (traditional) | 6 to 10% | 3 to 5% | 30 to 50% | $12,000 to $25,000 |
| Healthcare / Life Sciences | 4 to 8% | 2 to 4% | 25 to 45% | $5,000 to $12,000 |
| Business Services / Outsourcing | 3 to 6% | 1.5 to 3% | 35 to 55% | $3,000 to $7,000 |
| Retail / E-commerce | 3 to 6% | 1.5 to 3% | 45 to 65% | $2,500 to $6,000 |
| Media / Digital Content | 5 to 9% | 2 to 4% | 55 to 75% | $5,000 to $12,000 |
| Professional Services | 3 to 5% | 1.5 to 2.5% | 40 to 60% | $3,500 to $7,500 |
| Manufacturing / Industrial | 2 to 4% | 1 to 2% | 20 to 40% | $2,000 to $4,500 |
| Healthcare Services / Clinics | 3 to 6% | 1.5 to 3% | 20 to 35% | $2,500 to $6,000 |
| Education Technology | 8 to 14% | 3 to 6% | 50 to 70% | $6,000 to $14,000 |
| Logistics / Supply Chain | 2 to 5% | 1 to 2.5% | 25 to 45% | $2,000 to $5,000 |
"The benchmark isn't just 'how much is normal', it's 'how much is this company getting in value for what they're spending.' A portfolio company at $3,200/employee for software could be efficient or wasteful depending entirely on what they're running and whether it's priced to market."
Benchmarks by Revenue Tier: Size Matters#
IT spend ratios also shift significantly with company size. Smaller portfolio companies tend to have higher IT spend as a percentage of revenue because they lack the purchasing power to achieve enterprise discounts and often carry more per-unit overhead. The benchmark adjustments by revenue tier:
| Revenue Tier | IT % Revenue (Median) | Software % Revenue | Key Benchmark Driver | Primary Opportunity |
|---|---|---|---|---|
| $2B ARR | 2 to 5% | 1 to 2.5% | Maximum leverage; complex contract structures | Strategic vendor partnerships; custom pricing |
Software vs. Cloud: How the Mix Should Look#
Within total technology spend, the balance between software/SaaS and cloud infrastructure is a key health indicator. Companies with cloud-heavy spend relative to their business model may have architectural inefficiency. Companies with software-heavy spend and minimal cloud may have on-premise infrastructure debt.
Typical healthy technology spend mix by maturity stage:
- Cloud-native growth company: 55 to 65% cloud infrastructure, 30 to 40% SaaS, 5 to 10% hardware/other
- Mature enterprise B2B SaaS: 45 to 55% cloud, 40 to 50% SaaS, 5 to 10% other
- Traditional business with cloud migration in progress: 25 to 35% cloud, 40 to 50% SaaS, 20 to 35% on-premise/legacy
- On-premise dominated (pre-cloud): 85% utilization
- Cloud commitment utilization vs. contracted amount, alert at
On This Page#
- Why Benchmarks Differ
- By Industry
- By Revenue Tier
- Software vs. Cloud Mix
- Cross-Portfolio Opportunity
- Tracking Over Time
- Pre-Exit Normalization
- Key Takeaways