Security Budget Trends 2026: The Shift from CapEx to OpEx

Payroll closes in two days, the schedule is packed with overtime approvals, and a five-figure security renewal quote just landed on your desk. In many multi-site businesses, shifting critical security from big, lumpy purchases to predictable monthly services has reduced surprise bills and freed leaders from last-minute approval firefights. This guide shows how the 2026 move from one-and-done security buys to ongoing services works in practice, what it means for cash flow and risk, and the concrete steps to make the switch without putting your people, data, or payroll at risk.

Why 2026 Security Budgets Feel Different

Security no longer feels optional when attacks keep climbing. A recent survey of more than 300 senior security leaders found that 83% saw an increase in cyberattacks and 99% plan to increase cybersecurity spending over the next two to three years, with more than half expecting budget jumps of 6%–10%. That is not a one-off splurge; it signals that security is being treated as an ongoing operating reality.

At the same time, finance teams are nervous about the economy and interest rates. Research NuHarbor Security shows organizations now devote roughly 6%–14% of IT budgets, averaging about 11.6%, to cybersecurity, while high-rate environments push CFOs to delay big capital projects and favor flexible, consumption-based security services. The message to operations leaders is clear: protect the business, but do it with smoother cash flow and visible return.

For time-and-attendance and payroll accuracy, this is not abstract. If your time clocks, HR system, or accounting platform are locked by ransomware the day before payday, you are dealing with angry employees, manual workarounds, and compliance headaches. When you plan 2026 security spend, the question is not just “How much?” but “How do we fund security so it stays current, predictable, and aligned with the workflows you absolutely cannot afford to lose?”

CapEx vs OpEx In Security, Without The Finance Jargon

In finance terms, capital expenditure is money used to acquire or enhance long-lived assets and infrastructure. Capital spend shows up on the balance sheet and is expensed gradually through depreciation; operating spend hits the income statement immediately and reduces taxable income in the year you spend it.

Translating that into security, CapEx covers long-term investments in physical or long-lived security assets. You own the asset, you control it, and you pay a large amount up front. OpEx covers recurring costs like cloud security subscriptions, managed detection and response, security-awareness training platforms, and monthly perimeter monitoring, where you pay as you go and the provider owns and maintains most of the underlying technology.

Accounting treatment matters when you are trying to keep cash free for inventory, payroll, or expansion. CapEx is generally capitalized and expensed via depreciation. That means CapEx can support long-term asset value but ties up cash and pushes tax benefits into the future, while OpEx improves near-term cash flow and simplifies your books.

Security hardware also tends to lose value faster than accountants’ depreciation tables suggest. One example cited in Amarok’s analysis of perimeter security expenses notes that an iPhone 12 launched around $899.00 in 2020 and dropped to roughly $300.00 refurbished three years later. Many cameras, sensors, and security appliances follow the same curve: by the time you have fully depreciated them, they are outdated.

A quick side-by-side view helps clarify the trade-offs.

For an operations leader, the real question is which model makes it easier to keep security current while avoiding budget shocks that derail everything from payroll to planned hiring.

Why Security Spend Is Tilting Toward OpEx In 2026

The move from CapEx to OpEx is not just a cloud buzzword; it is already reshaping physical security, video surveillance, and access control, as highlighted in industry discussions of CapEx–OpEx shifts in security. Providers increasingly package hardware, software, and monitoring into service bundles that sit naturally as operating expenses.

Macroeconomics is pushing in the same direction. NuHarbor’s research on rate hikes and cybersecurity spend shows that when interest rates rise, capital-intensive projects like data center upgrades and hardware refreshes are often postponed, while subscription-based managed security services gain favor because they spread cost over time and keep cash free for core operations. For 2026 planning, that means OpEx-centric security proposals are more likely to survive CFO scrutiny.

The threat side of the equation will not relax. The KPMG 2025 Cybersecurity Survey reports that 98% of organizations already increased cybersecurity investment in the past year and almost all plan further increases because phishing, ransomware, and AI-based social engineering attacks keep rising. Those are not problems you can “fix and forget” with a one-time hardware purchase; they require continuous monitoring, patching, and training, which inherently fits an OpEx model.

Technology architecture is another driver. Shifting data and workloads from on-premises infrastructure into cloud and infrastructure-as-a-service can reduce both CapEx and many types of operating overhead associated with owning hardware, as outlined in IT spending comparisons between on-premise and cloud models. Instead of overbuying servers and storage that sit idle most of the year, you rent what you need and let the provider handle power, cooling, and much of the security baseline.

Concrete physical security is following the same pattern. Amarok’s perimeter security model describes subscription-based services where a company might protect a 4-acre yard and three buildings now, then scale up coverage to six acres and five buildings later without overbuying cameras and fencing upfront. The provider owns and maintains the equipment, handles repairs and upgrades, and folds everything into a predictable periodic fee. For an operations team, that means less time chasing vendors for broken cameras and more time focused on throughput and accurate hours.

Put together, these forces mean 2026 security budgets will naturally lean toward OpEx for anything that must stay continuously up to date, from cloud identity security to 24/7 monitoring to modern physical perimeter protection.

How To Decide What Goes OpEx And What Stays CapEx

The decision is less about “OpEx good, CapEx bad” and more about aligning spending style with how critical, changeable, and regulated each part of your environment is.

Protect Core Workflows With OpEx First

Start by mapping what absolutely cannot go down without disrupting payroll, scheduling, time tracking, or customer commitments. For most small and mid-sized operations, that list includes HR and payroll systems, timekeeping and access control, email, and key business apps.

Ongoing defensive functions that protect those systems generally belong in OpEx. Managed detection and response, cloud email security, identity and access management, security awareness training, and incident response retainers all require expertise and constant updates that are hard to staff in-house. Executive-focused guides such as Meriplex’s cybersecurity budgeting recommendations for growing businesses emphasize optimizing spend without weakening core protections, which often means leaning on managed services and subscriptions rather than building a full 24/7 security team internally.

A practical example: if your payroll and HR run on a cloud platform, you can treat identity protection, multi-factor authentication, endpoint protection for payroll staff, and backup validation as an integrated security service with a fixed monthly cost. That avoids the pattern of running lean until an incident occurs, then scrambling for emergency approvals and one-off consulting projects that blow up both the calendar and the budget.

Use CapEx Where Control Or Regulation Demand It

There are still solid reasons to invest in CapEx for certain security controls. Verus notes that capital expenditure can provide stronger ownership of and accountability for critical infrastructure. If your business handles sensitive medical or financial data, you may decide to own specific infrastructure or physical access-control components to maintain tighter oversight.

Building access hardware, specialized industrial sensors, or secure server rooms that are tightly integrated with facility layouts can be sensible CapEx, especially if they do not change often. In those cases, you treat the hardware as a long-lived asset, but you can still wrap it with OpEx services such as remote monitoring, firmware management, and periodic security assessments.

Think of a regional payroll processing firm that hosts a small on-premises cluster for compliance reasons. The servers, racks, and door controls may be CapEx, but intrusion detection, log monitoring, and offsite backup can still be funded as OpEx services. That blend keeps auditors happy while avoiding the need to staff a full security operations center.

Keep A Hybrid And Phased Approach

Most organizations land in a hybrid model. Verus explicitly highlights a hybrid CapEx–OpEx approach as a practical way to balance long-term investments with flexible services. The goal for 2026 is not to flip everything to OpEx overnight but to deliberately choose which investments to convert as contracts renew or assets reach end of life.

For example, you might decide that in 2026, all new security investments for cloud workloads, email, remote access, and user training will be OpEx-based services, while existing camera and access-control infrastructure remains in place until it fully depreciates. That approach avoids write-offs, keeps the finance team onside, and still moves the security program toward a more flexible footing.

Practical Steps To Rework Your 2026 Security Budget

Once you know the direction, you need a simple, operational way to execute it across your budget spreadsheets, contracts, and calendars.

Map Current Security Spend By Category

Begin with a one-page view of what you already spend. Categorize each line item as CapEx or OpEx and note whether it protects physical assets, network and servers, cloud apps, or people and process. Guidance on clarifying what counts as CapEx versus OpEx underscores that software bought outright and physical equipment typically sit in CapEx, while subscriptions, managed services, and insurance live in OpEx.

For a typical mid-sized operation, that map might show camera hardware, door controllers, and some on-premises firewalls in CapEx, and items like antivirus licensing, security-awareness training, managed firewalls, cyber insurance, and backup subscriptions in OpEx. Once you see it laid out, it becomes easier to decide what to convert at each renewal.

Turn Big Projects Into Services

Next, look at upcoming big-ticket security projects and ask whether a service model could meet the same requirements. NuHarbor’s analysis of rate-driven security spending trends points out that capital-heavy hardware upgrades are the first to be delayed when borrowing costs rise, while subscription-based security platforms and managed services gain traction because they are easier to start and stop.

Physical perimeter security is a straightforward example. Instead of purchasing all fencing, electric deterrents, cameras, and recording systems outright, Amarok’s OpEx-focused perimeter security approach bundles design, installation, maintenance, and monitoring into a recurring service. You avoid tying up capital and do not have to predict future growth perfectly; you expand coverage as the yard or building footprint grows. The same logic applies to network security appliances, where cloud-managed firewalls and secure access services can replace traditional hardware refresh cycles.

Build A Calendar And KPIs, Not Just Line Items

Finally, shift your mindset from “What do we own?” to “What outcomes do we get, and when?” Instead of treating security as sporadic projects, you want a calendar of renewals and reviews that lines up with your budgeting cycle and payroll-critical dates.

Macro-focused research on how economic cycles shape cybersecurity spend recommends using clear risk-based metrics to justify investments. For an operations leader, that can mean tracking measures such as unplanned security-related downtime affecting payroll or production, the number of high-risk vulnerabilities older than a set threshold, or the frequency of phishing simulations clicked by staff. When you tie OpEx security services directly to reduced disruptions and cleaner payroll runs, budget discussions become far less adversarial.

A simple example: if your current setup causes two or three payroll-impacting outages a year that each consume dozens of staff hours to triage and fix, you can baseline that cost in management time and overtime. Then you compare it with a managed security service that commits to specific response times and produces fewer incidents. Even without inventing exact dollar figures, that framing is easier for a CFO to support than a bare request for “more security tools.”

Common Pitfalls In An OpEx-Heavy Security Strategy

Shifting toward OpEx solves many problems but introduces new ones if you do it haphazardly.

One risk is subscription sprawl. When every new security need is met by yet another cloud platform, you can end up with overlapping tools, multiple dashboards, and rising monthly bills that are harder to track than the old hardware cycle. This is the same “tool sprawl” many organizations already face in IT; it simply moves to a different line on the budget. Keeping a single inventory of services, owners, and renewal dates is essential.

Another hazard is trading hardware lock-in for vendor lock-in. Finance-focused analyses of OpEx models point out that recurring subscriptions can accumulate over time, and Verus notes that reliance on external providers raises exposure if a vendor underperforms or changes pricing. When you negotiate security-as-a-service contracts, make sure you understand exit clauses, data export options, and what happens to your protections if you decide to move elsewhere.

A third trap is underinvesting in people and process because the services feel “set and forget.” Managed detection or perimeter services are not substitutes for clear incident response plans, drills, and accountability. Operations and HR teams still need to know who does what if a security incident hits on payroll cut-off day, who can approve emergency downtime, and how to communicate with staff if systems are briefly offline.

The fix for all three pitfalls is the same: treat OpEx security services as part of your operating system, not as miscellaneous subscriptions. Consolidate where possible, align service choices with clear workflows, and revisit both spend and outcomes on a predictable cadence.

FAQ

Is It Realistic To Shift Most Security Spend To OpEx By 2026?

For many small and mid-sized organizations, yes, especially for cyber defenses and monitoring. Budget benchmarks for 2025 show security already consuming a meaningful slice of IT spend, and industry conversations, including security-focused CapEx–OpEx trend reports, point toward more services and fewer outright purchases. Physical infrastructure and highly regulated systems will likely remain partly CapEx, but most monitoring, training, cloud security, and analytics can be shifted to OpEx over one or two refresh cycles.

How Do I Get My CFO On Board With More OpEx Security?

CFOs care about cash flow, tax treatment, and risk. FinanceAlliance’s comparison of CapEx and OpEx notes that OpEx is typically fully deductible in the year incurred, and Amarok highlights that treating security as OpEx can smooth cash flow and minimize surprise repair or replacement expenses. Pair that with risk data from sources like NuHarbor’s breakdown of rising cyber threats and budget pressures and show how predictable monthly security spend prevents disruptions that would directly affect payroll accuracy, overtime costs, and revenue. Frame the shift not as “more security spend” but as trading unpredictable emergencies for stable, measurable protection.

Closing

Security is now a permanent cost of doing business, just like utilities or payroll, and 2026 is the year your budget needs to reflect that reality. If you methodically move the right controls into OpEx, keep CapEx where it truly adds long-term value, and track the impact on downtime and payroll stability, you turn security from a string of budget fires into a controlled, predictable part of operations. That is how you protect your people and your numbers without losing sleep or control.

About the author

Silas Mercer

Small Business Efficiency StrategistWorkforce Management ConsultantCloud Systems Integration Specialist

Silas Mercer doesn't just track time; he reclaims it. With over 15 years of experience turning chaotic back-offices into well-oiled machines, Silas creates content for business owners tired of payroll errors and time theft.

As a pragmatic 'Operations Fixer,' he specializes in bridging the gap between complex cloud technology and everyday small business needs. His mission? To help you implement NGTECO’s AWS-secured solutions to automate attendance, ensure compliance, and focus on what really matters: growth. No jargon, just results.