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

Nearly a third of software budgets for enterprises is spent on upgrades, migrations, and licensing changes they did not request, according to research by software support provider Origina. The study, conducted with market research firm Censuswide, surveyed 2,018 senior IT decision-makers in the US and UK and found that the average share of budgets allocated to vendor-driven changes is 28 percent.

Respondents reported paying an average of $12.87 million for each vendor-driven change over the past three years, despite expecting poorer reliability, performance, or value. In fact, 95 percent of respondents said they had paid for at least one such change, even when they were aware of potential negative impacts. To meet these vendor deadlines, 91 percent of organizations retired working hardware, sacrificing about 1.65 years of its remaining useful life on average.

Furthermore, 84 percent of respondents said experienced engineers were frequently pulled away from other projects to handle these vendor-driven upgrades and migrations, leaving less time for the actual work businesses wanted to accomplish, including AI projects. Despite the high costs and potential drawbacks, 76 percent of respondents said they had little negotiating leverage with their major software vendors.

Some 91 percent of respondents even backed legislation that would grant enterprise software customers protections similar to those of long-term residential tenants. Origina's founder and CEO, Tomás O Leary, suggests that customers find themselves in a difficult position, where refusing an unwanted upgrade often seems like the rational choice.

He believes the market has left some of the most experienced technology leaders with little room to say no, and that this arrangement is reflected in budgets, engineering time, and the innovation that never gets funded.