Software upgrades eat nearly a third of companies’ IT budgets, survey finds

A startling new survey conducted by software maintenance provider Origina reveals that large US and British corporations are spending a staggering 28% of their software budgets on vendor-driven upgrades, migrations, and licensing changes they were not willing to initiate. This phenomenon, dubbed a "software tax," adds unnecessary expenses and operational risks as businesses scramble to adopt AI solutions.

The study, which polled over 2,000 companies, unveiled that 95% of respondents had paid for upgrades they believed would deteriorate performance. Moreover, 80% admitted that departing from a major software vendor would severely disrupt their operations. A significant 84% of senior engineering staff admitted to allocating time to vendor-mandated software changes rather than focusing on innovation or business-centric development.

The financial burden of these unwanted upgrades is significant, with 91% of companies reporting they retired fully functional hardware within the last three years to comply with vendors' support deadlines. On average, this decision resulted in the loss of 1.65 years of remaining useful life for the retired equipment.

Origina CEO Tomas O’Leary emphasized that this issue is widespread and affects other regions as well. He highlighted that older companies with more complex technology stacks face the greatest challenges. The most recent vendor-driven software change resulted in an average annual cost of $12.87 million for the surveyed organizations.