Aug 20 2026
Artificial Intelligence

Rightsize Your AI: How Small Businesses Can Build Infrastructure That Actually Fits

Small to medium-sized IT teams are turning to hybrid environments to run artificial intelligence in a way that fits their budgets, their data and their goals.

Artificial intelligence is no longer just for large enterprises with deep pockets. Small to medium-sized businesses (SMBs) are putting AI to work in their day-to-day operations, and choosing the right infrastructure to support it is one of the most consequential decisions their IT teams will make.

For many organizations, the answer is a hybrid approach — combining cloud resources with on-premises equipment to stay flexible without overspending. In fact, IDC predicts that by 2028, 75% of AI workloads will be deployed on hybrid infrastructure.

“The future of the data center is hybrid,” says Sana Gutierrez, senior manager of the data and AI practice at CDW. “There are organizations that are going to decide to begin within a cloud environment, and that posture completely can change. They need to understand how they want to take workloads — whether they’re in the cloud, on-premises or in a neocloud — and put them in the right place to gain maximum benefit.”

As organizations look to build AI infrastructure that can grow with them, the key is matching their approach to their actual business needs — not chasing what larger companies are doing.

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Matching AI Infrastructure to Your Business Needs

One of the biggest benefits of hybrid infrastructure is that it lets you place workloads where they make the most sense. The public cloud works well for experimentation or when you need a burst of computing power. On-premises GPU clusters can handle predictable, steady workloads and keep sensitive data under your control.

For smaller IT teams, this flexibility is especially valuable. You don’t have to commit to a single approach upfront. You can start in the cloud, learn what your AI actually needs, then make smarter infrastructure decisions as you go.

“Whether an AI workload is running in the cloud or on-premises is going to depend on the organization’s specific needs for artificial intelligence,” says Mariano Carro, principal field solutions architect for Microsoft hybrid infrastructure at CDW. “Most of the time, we are going to need some resources in the cloud to do the training and for the high level of compute that we need. But once we get that training complete, we may move a workload on-premises to improve performance or protect data privacy.”

Hybrid infrastructure also helps manage costs and supports compliance with data regulations such as HIPAA and the EU’s General Data Protection Regulation — without requiring a massive upfront investment.

LEARN MORE: See how a strategic approach to infrastructure can optimize your AI initiatives.

Deciding Where To Run Your AI Workloads

Workload placement isn’t a one-time decision. As your use of AI matures, where it makes sense to run different applications will likely shift.

Workload placement is going to take into consideration things like latency as well as accessibility,” says Eryn Brodsky, server and storage practice lead at CDW. “Businesses need to think about what AI outcomes they want to leverage the data. You need to have quick access to it, but you also have to ensure that you have proper access to it.”

Many SMBs start in the cloud — and that’s a smart place to begin. But as cloud bills climb, bringing some workloads back in-house often makes financial sense.

“It’s not uncommon for us to see customers starting in the cloud, as the majority of our customers are, then bringing those applications back on-premises. We call it repatriation,” Brodsky says. “They repatriate those workloads on-prem because they have to consider the cost of maintaining those applications and those workloads in the cloud versus the cost of being able to invest in the architecture to support them.”

Performance is part of the equation too, particularly as AI takes on more demanding tasks in your organization.

“What we’re looking for is lowest cost per function or lowest cost per token,” Gutierrez says. “Leveraging all of the available optimizations — whether it’s through power and cooling, accelerated infrastructure, better data pipelines, better data posture — is really important to achieving the desired outcomes, reducing latency and getting users the information that they need, when they need it.”

Eryn Brodsky headshot
Businesses need to think about what AI outcomes they want to leverage the data. You need to have quick access to it, but you also have to ensure that you have proper access to it.”

Eryn Brodsky Server and Storage Practice Lead, CDW

How Microsoft Azure Local Helps SMBs Build AI Infrastructure

For smaller organizations exploring hybrid AI, Microsoft Azure Local is worth a close look. It lets businesses build out AI capabilities on-premises while staying connected to the cloud — all managed through a single control plane, so you’re not juggling multiple systems.

“Businesses need an infrastructure that can grow with their needs, and with Azure Local, you can do that,” Carro says. “You can begin small, and then you can add modularly to satisfy the needs of your artificial intelligence.”

That modular approach is a natural fit for small businesses. Instead of making a large upfront commitment, you can start with what you need now and expand as your AI initiatives evolve.

“Centralized control through Azure Arc is going to give us the way to manage our GPUs, our policies and our workloads across on-premises and the cloud,” Carro says. “This makes it easier for IT teams to scale artificial intelligence consistently without having operational problems, because we are watching everything on the same control panel.”

Azure Local also keeps AI performance high by running GPU-accelerated workloads close to your data — reducing latency without sacrificing access to cloud resources when you need them.

READ MORE: Learn how Microsoft Azure Local can help enhance and refresh your data center.

Aligning Your Infrastructure With Business Outcomes

Ultimately, AI infrastructure should serve your business goals — not the other way around. For SMBs, that means being deliberate about where workloads run, keeping costs in check and choosing solutions that can grow alongside the business.

“When organizations get AI and accelerated compute right, there is a material benefit to the bottom line,” Gutierrez says.

You don’t need an enterprise-scale data center to benefit from AI. With a hybrid approach and the right guidance, SMBs can build infrastructure that delivers real results today — and scales to meet tomorrow’s needs.

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