Published by Tenth Gear Consulting

By now you probably heard of DeepSeek that trained an AI model at significantly lower cost that OpenAI (and on a less powerful hardware) that hit similar benchmarks.

Their secret?

They did more with less, becoming another scrappy company that beat a well funded and better known competitor.

This was a real-life reminder that innovation often sparked by limited resources, questioning existing status quo can lead to better decisions and being smaller and more agile is an advantage.

Getting a handle on tech cost increases

Efficiency in IT budgets is the goal for 2025. Per Gartner’s published report, the spending is estimated to grow 14% on software, 23% on data centers and 9% I IT services (with almost 10% average spend increase across all categories due to somewhat reasonable 4% communication services bump).

What’s worse, the growth in IT products and services may not directly translate to ROI - just because AI will be bundled everywhere doesn’t mean your business can magically benefit from it in a reasonably measurable way.

So how do you become scrappy?

Challenge old advice

“You must run your software on Windows OS”

If your situation allows switching to Linux/Unix and other open source alternatives would significantly reduce the cost- from servers (almost 50% less) to databases to desktop computers the savings will add up.

“You must purchase SSL certificate from DigiCert”.

Depending on your business and industry regulations, a domain level validation certificate from LetsEncrypt (cost - 0) could be sufficient.

“Your servers should be hosted on AWS or Azure.”

Your needs may be covered by purchasing VPS from Digital Ocean - at almost half the cost, better CPU price performance and transparent easy to understand costs. Just like with insurance, it pays to shop around.

What other assumptions do you follow?

Cut through marketing hype - ask tough questions

Tech is not magic - but you may think it is by listening to some sales pitches! Be skeptical and informed on how something works on a high level so you can ask tough questions.

“Use AI to solve all customer support calls” may mean ”Your customers will hate you” or “Your company will be more efficient”. How to tell the difference? By knowing what to ask and insist on metrics.

Don’t be afraid to DIY - with some help

Paying 15$ for a subscription here and there makes sense, right?

In the past the idea of bringing anything in-house or DIY was unadvisable - of course you would save more money hosting everything in the cloud and using SaaS providers and if you don’t, terrible things will happen.

But this may be changing. Especially if you have an internal team with appropriate skillset or interest in learning them.

With advent of AI coding tools (Bolt, Windsurf and Lovable Dev are just few examples) it’s possible to create a function-specific app via text prompt that solves your problem faster and at lower cost - and deploy it automatically.

Modern server management tools reduce the time and complexity required to run them.

There is a learning curve for sure - but it may be time to evaluate if building up these skills worth gaining more control over cost and ownership.

Tech Radar - the Operator and AX

The mobile device revolution changed the way we use the internet thanks to the always available portable pocket computer and narrow purpose apps.

We are now looking into another wave of innovation. OpenAI had rolled out the research version of the Operator - a tool that can use the web to complete an unscripted task for you.

What does that mean for your business future? Your next customer may not be human.

Business Model Emerging Risk

Y combinator - a startup incubator with impressive track record of noticing and supporting emerging tech companies - is good at observing trends.

So their call for startups is an excellent trend study - and in 2025 they are betting on vertical AI agents - LLM deeply skilled in a single domain, such as accounting, law, compliance or marketing.

Realistically such specialized services are hard to automate. The knowledge and expertise is just part of the equation - real world is messy, people like to deal with other humans and there are certain legal and ethical implications.

On the other hand, if we imagine such challenges are solved, it will be difficult to justify premium pricing if a similar service is available at fraction of the cost at 24/7 availability.

Could that put your business at risk? Business books are full of examples where companies with significant market advantage failed to recognize the trend and disappeared forever. I would advocate that your strategic 5 year planning should include possible pivots, including leveraging AI and creating previously impossible products and services.

Multiple solutions that I’ve developed over the years would have been much more efficient and quicker with the current technology.

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