IT hardware costs: UK SMEs, buy or wait?

IT hardware costs have risen sharply for UK SMEs this year, and the obvious response is usually the wrong one: waiting for prices to settle. So is replacing everything at once. The right answer is different for each machine you own, and sorting them takes an afternoon.

Most of the cost sits in a small number of laptops. Find those, and the decision gets a lot cheaper.

Sort your laptops into three piles before you price anything

Windows 10 left support on 14 October 2025. The most expensive mistake since has been treating your kit as one lump that must either be replaced or paid to keep. Sort it first.

Pile one: already on Windows 11. No deadline, no licence fee. Your only question is when to replace on age and performance.

Pile two: on Windows 10, but capable of running Windows 11. These upgrade in place, free. Microsoft still states plainly that "upgrades to Windows 11 from Windows 10 are free", and publishes no end date for the offer. The cost here is an engineer's time, not capital.

Pile three: on Windows 10 and cannot take Windows 11. This is the expensive pile, and the only one where paying for Extended Security Updates is a rational purchase rather than an admission of drift.

To sort piles two and three, run Microsoft's PC Health Check app rather than trying to read processor lists. Windows 11 requires TPM 2.0, UEFI with Secure Boot, a compatible 64-bit processor with two or more cores, 4GB of memory and 64GB of storage. The in-place upgrade also needs Windows 10 version 2004 or later with the September 2021 security update installed. Microsoft does publish processor lists, but they are manufacturing lists for OEMs building new devices, and Microsoft explicitly directs anyone asking about their own machine to PC Health Check instead.

How big is pile three likely to be? Smaller than it feels, but larger than the national figures suggest. StatCounter put Windows 11 at 81.39% of UK desktop web traffic in June 2026, against 17.35% on Windows 10, down from 38% ten months earlier. That measures browsing activity, not devices, and it is dominated by home and personal use. Managed business kit migrates later, because of procurement cycles, line-of-business application testing and exactly the ineligible-hardware tail this article is about. Expect your own share to be higher than 17%, and do not plan on a number you have not measured.

Already on Windows 11? Three things still apply

If pile one is most of your kit, the Windows 10 deadline is not your problem. These are.

• Replacement prices have moved. UK Surface list prices rose 22% and 28% in April 2026, and business laptops followed.
• Ordering early does not fix a price. Ask any supplier whether a quote is price-locked, and get the answer in writing.
• Entry configurations have been shrinking. Some machines that look 10% cheaper are 8GB where they used to be 16GB.

What a business laptop actually costs in the UK right now

Prices have moved, and vendors have been unusually direct about why. When Microsoft raised UK Surface prices in April 2026 it said the increase was "due to recent increases in memory and component costs". The moves were not small: the 13in Surface Laptop went from £899 to £1,099 and the 12in Surface Pro from £779 to £999, which works out at rises of roughly 22% and 28% on Microsoft's published list prices.

The cause is upstream. Memory makers have been steering capacity towards AI server demand, and TrendForce forecast conventional DRAM contract prices rising 13% to 18% quarter on quarter in the third quarter of 2026. The same forecast notes those gains are moderating as buyers reach an affordability limit. So prices are still rising, more slowly. What none of the published forecasts give is a date when they fall.

I checked five UK resellers on 28 July 2026. A new 14in business laptop with a Core i5 or Ryzen 5, 16GB of memory, a 512GB SSD and Windows 11 Pro ran from about £610 to £1,100 including VAT. That is a £490 spread on nominally equivalent kit. Refurbished equivalents sat around £300 to £360.

Identical part numbers were priced very differently. A Lenovo ThinkPad E14, SKU 21SX0046UK, was about £925 including VAT at one reseller and £1,030 at another on the same day, a spread of just over 11%. That is one observation rather than a market survey, but it cost ten minutes to find, which tells you what a second quote is worth.

Availability was patchy. Several listings were pre-order or "ordered upon request", and stock on specific configurations was thin enough that lead time belongs in the decision rather than after it.

In December 2025 an internal Dell memo, reported by Business Insider and picked up widely, told Dell sales staff that "ordering today for future delivery DOES NOT lock in current pricing". That is one vendor and it is months old, so do not treat it as a general rule. Treat it as a question worth asking any supplier, and getting answered in writing.

The 16GB question, and why 8GB is a false economy

Memory is what got expensive, so the instinct is to accept 8GB and hold the price down. The numbers say otherwise.

I priced a like-for-like listing at UK reseller Misco on 28 July 2026. An HP ProBook 445 G11 with 8GB was £843.99 excluding VAT and the same machine with 16GB was £882.99. Same processor, same 512GB SSD. The uplift to double the memory was £39, about 4.6%.

There is no contradiction between that and rising prices. The shortage moves the cost of the whole machine, which is why the Surface rises above were 22% and 28%. It has not yet moved the price of the upgrade option by anything like as much. If that gap does close, specifying up later will cost more than specifying up now.

Against a laptop you expect to keep for four or five years, £39 is not a saving worth making. Some manufacturers have also moved entry configurations back to 8GB where 16GB had become normal. Microsoft's product blog announced the Surface Laptop for Business 13in in May 2026 with an 8GB configuration to follow later in the year, and Tom's Hardware reported new machines from Dell and Acer starting at 8GB at Computex 2026. This is not universal, and plenty of models still ship 16GB as standard, but a flat headline price can conceal a smaller machine.

What staying on Windows 10 actually costs

For pile three, the alternative to replacement is Extended Security Updates. It is a real option and it is priced.

First, a headline that has misled a lot of people. Microsoft did extend free ESU to October 2027, but that covers personal devices only. It does not apply to domain-joined or centrally managed business machines. If your laptops are managed, you are on the commercial programme and it is not free.

Microsoft sells commercial ESU through volume licensing at $61 USD per device for year one, and "the price doubles every consecutive year, for a maximum of three years". Microsoft publishes no sterling list price and the large UK licensing partners quote rather than publish, but smaller UK resellers do. Senetic listed year one at £49.51 excluding VAT in late July 2026, and others sit a little higher, so budget roughly £50 to £60 per device excluding VAT.

Three conditions are easy to miss:

• Minimum purchase is one licence, so being small is not a barrier.
• Devices must be on Windows 10 version 22H2 to enrol at all, so an older build needs updating first.
• ESU is included at no extra cost for Windows 10 virtual machines on Windows 365 and Azure Virtual Desktop, so if you already run either, pile three may be cheaper than you think.

Two details matter more than the headline number.

Enrolment is cumulative. Microsoft's wording is unambiguous: "If you decide to purchase the program in Year Two, you have to pay for Year One too, as ESUs are cumulative." You cannot skip a year and rejoin cheaply. Drifting past a renewal without deciding costs you the year you did not use.

On IASME's guidance, ESU keeps you Cyber Essentials compliant, and skipping it does not. The NCSC's Cyber Essentials requirements (v3.2) say that all in-scope software must be licensed and supported, and that critical and high-risk vulnerability fixes are applied within 14 days. IASME, which certifies Cyber Essentials, addresses ESU directly in its Cyber Essentials Knowledge Hub. ESU meets the requirements when implemented correctly. Windows 10 devices in scope that are not enrolled are treated as unsupported and will not comply.

If you hold Cyber Essentials for tenders, insurance or supply-chain reasons, the ESU fee buys certification cover as well as patches. If you are not certified yet, the Cyber Essentials certification guide covers what falls in scope. Skip ESU and keep the machines online and you have a certification problem, not just a risk appetite question. That belongs in your IT risk management register.

The ESU break-even test: will IT hardware costs fall enough to pay for waiting?

The strongest case for deferring is not about prices at all. It is that a machine you already own still does its job, and £66 including VAT buys another year of use out of an asset you have already paid for. If the laptop is genuinely fine and cash is tight this quarter, that is a reasonable trade and nobody should talk you out of it.

The weaker case, and the one usually made, is that waiting will get you a cheaper laptop. That one you can test.

A year of commercial ESU costs roughly £55 excluding VAT, or £66 including VAT. Year two doubles, so two years costs about £198 including VAT. Waiting only pays if the replacement price falls by more than the ESU you buy while waiting:

Break-even fall = ESU paid to date / today's replacement price

Now put that against the evidence. Prices rose through 2026 and the increases are moderating rather than reversing. No credible source publishes a date for a fall of any size, let alone these. You are not choosing between a certain cost and a possible saving. You are betting on a fall that nothing in the current evidence points to.

Two further things tighten it. The cumulative rule means a deferral that slips is not year two at £132, it is years one and two together. And the machine that was going to be replaced next year is often still there three years later, on year three ESU at four times the year one rate, running work it was never specified for. That is technical debt with an invoice attached.

So defer if the kit still works and the cash matters. Do it with a date in the calendar and an owner against it. A bridge is a decision; a bridge nobody revisits is just a delay.

Buy, lease or bridge, and the tax question

The reflex answer is that leasing is more tax efficient. For most UK SMEs it is not the lever people think.

The Annual Investment Allowance gives 100% relief on up to £1 million of qualifying plant and machinery, including computers. It is open to sole traders, partnerships whose members are all individuals, and limited companies alike, so it covers a dozen laptops many times over.

Full expensing also gives 100% relief, but only to companies within the charge to corporation tax, and it excludes assets "bought to lease to someone else". A separate 40% first-year allowance applies to new and unused main-rate assets bought from 1 January 2026.

Choose on cash flow, lifecycle and who carries disposal, not on a tax advantage that has largely equalised. This is general information and not tax advice, so confirm your own position with your accountant before it drives a purchase.

If you do look at Device as a Service, compare carefully. UK providers bundle differently. HardSoft's monthly fee covers support and repairs, while Modern Networks lists operating system support, device backup and monitoring as separate chargeable services. Those are not the same product at the same price, and a per-device monthly figure tells you little on its own.

Key takeaways for SME owners

• Sort your laptops into three piles before pricing anything. Pile three is where the money is.
• Run PC Health Check. National statistics will not tell you the size of your own problem.
• Windows 10 machines that meet the Windows 11 requirements can upgrade in place for free, with no end date announced.
• Commercial ESU runs about £50 to £60 per device excluding VAT in year one and doubles annually, and enrolment is cumulative if you join late.
• IASME's guidance is that paid ESU keeps you Cyber Essentials compliant. Skipping it does not.
• Waiting a year only pays if replacement prices fall by roughly 6% to 11%, and two years by 18% to 32%. The forecasts that exist still point up.
• Specify 16GB. The uplift was about £39 and entry configurations are quietly shrinking.

What I would do this quarter

In order, cheapest first.

Run PC Health Check across your laptops. It is free and it takes an afternoon. Until you know the size of pile three you are guessing, and most businesses guess wrong in both directions.

Upgrade everything in pile two. Free licences, and it removes those machines from the problem permanently.

Price pile three properly. Compare replacement against ESU over three years rather than one, and use the cumulative rule in the maths. Get two quotes on identical part numbers. If the count comes back bigger than you hoped, the sequencing and the cash flow become the hard part rather than the technology, and IT management support is worth pricing.

Specify 16GB. The premium is small and the alternative ages badly.

If you defer, defer deliberately. One year of ESU with a diarised review date is a decision. The same thing without a date is drift, and it gets expensive by year three.

If the numbers need building into something your board will sign off, the same discipline applies as to any capital request: see building the business case for IT budget.

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Rising IT hardware costs feel like a problem to postpone. For most UK SMEs it is a smaller problem than it looks, concentrated in a handful of machines, and it gets more expensive the longer it stays unsorted.

Run PC Health Check this week and count pile three. That count is the easy part, and everything above tells you how to get it. The expensive part is what comes next: which machines go in which quarter, what that does to cash flow, and what you put in front of the board.

That part is worth a conversation. Tell me your pile three count, or just your headcount if you have not run it yet, and I will come back with a costed replacement schedule phased across quarters, with the ESU bridge priced for anything that has to wait. Thirty minutes, no charge, and the schedule is yours whether or not you work with me. Book a 30-minute hardware review.