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

A significant portion of software budgets is being spent on upgrades, migrations and licensing changes that companies did not request, according to new research. The study, conducted by Censuswide for software support provider Origina, surveyed 2,018 senior IT decision-makers in the US and UK, with the average share of the budget allocated to such changes found to be 28 percent.

The costs of these vendor-driven changes can be substantial, with the most recent one costing organizations an average of $12.87 million. Customers may not be getting better value for their money, as 95 percent of respondents said they paid for at least one vendor-initiated change in the past three years despite expecting worse reliability, performance or value.

Even more concerning is the impact on hardware retirement, with 91 percent of respondents saying their organizations had retired working hardware to meet software support deadlines, resulting in an estimated loss of 1.65 years of remaining useful life on average. The survey also reveals a shortage of experienced engineers to handle these upgrades, with 84 percent of respondents reporting that such engineers are frequently pulled away from other projects to accommodate vendor-driven changes.

This leaves less time for projects that businesses actually prioritize, including AI and data initiatives. While customers may express frustration with vendor-driven upgrades, many feel they have limited negotiating power. Ninety percent of respondents said vendor-driven costs contributed at least moderately to the delay, pause or cancellation of AI or data projects.

Origina's founder and CEO, Tomás O Leary, argues that customers have been put in a difficult position, and the market has left some of the most experienced technology leaders with limited options, resulting in significant budgetary and innovation losses. The research suggests that IT leaders are growing increasingly frustrated with the current arrangement, with 91 percent supporting legislation to give enterprise software customers protections similar to those for long-term residential tenants, and 82 percent backing software maintenance requirements akin to EU hardware repairability rules.