Enterprises blow nearly a third of software budgets on upgrades they never asked for

A new study reveals that a significant portion of software budgets are being consumed by upgrades, migrations, and licensing changes that companies did not request. Conducted by Censuswide for software support provider Origina and published with Thinkers50, the research surveyed 2,018 senior IT decision-makers in the US and UK. The average share of budgets allocated to these unplanned expenses is estimated at 28 percent.

Respondents reported that 95 percent of them had paid for at least one vendor-driven change in the past three years, despite anticipating poorer reliability, performance, or value. The most recent vendor-driven change cost organizations an average of $12.87 million. Origina calls this phenomenon "the software tax," but unlike traditional taxes, it often results in a decline in IT system performance.

Additionally, 91 percent of respondents said their organizations had retired working hardware to meet software support deadlines, sacrificing an average of 1.65 years of remaining useful life. The search also highlights a shortage of experienced engineers, with 84 percent of respondents stating that these individuals are frequently diverted from other projects to handle vendor-driven upgrades and migrations.

This diverts resources from businesses' actual priorities, including AI and data projects. While customers may desire to dictate their suppliers' upgrade priorities, many feel they have limited negotiating power. Origina founder Tomás O Leary suggests that customers are left with little choice due to the market's constraints. Some 76 percent of respondents expressed little leverage when negotiating with major software vendors.

The research also indicates growing frustration among IT leaders, with 91 percent supporting legislation providing software customers with protections similar to those of long-term residential tenants, and 82 percent backing software maintenance requirements akin to EU hardware repairability rules. Origina's commercial interests align with these findings, as it offers independent support for enterprise software as an alternative to vendors' maintenance and upgrade arrangements.