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

Large US and British corporations are allocating nearly one-third of their software budgets to vendor-imposed updates, upgrades and licensing modifications that were not actively sought, according to a software maintenance provider survey released on October 20. The findings reveal these forced upgrades as a costly "software tax" that can bring operational risks and disruptions, with 95% of the 2,000 companies surveyed admitting to paying for upgrades they believed would negatively impact performance.

The study highlights that 80% of respondents feared a major software vendor departure could severely disrupt their business operations, while 84% noted senior engineering staff consistently dedicating time to vendor-mandated software changes instead of focusing on innovation or business-driven development. Additionally, 91% reported retiring fully functional hardware in the past three years to meet vendor support deadlines, sacrificing an average of 1.65 years of remaining useful life on each device.

CEO of Origina, the provider behind the survey, Tomas O'Leary emphasized that this issue is prevalent across various sectors and regions, with larger companies grappling with more complex technology stacks facing the greatest challenges. On average, the most recent vendor-driven software change resulted in an annual cost of US$12.87 million (S$16 million) for the surveyed organizations.