What is the ‘software tax’ and how is it affecting budgets?
New research from Origina suggests that companies may unknowingly be misusing their budgets when it comes to upgrading technologies.
The "software tax" is a term used to describe the recurring burden that comes with implementing advanced technologies and strategies in enterprise software. This hidden cost, as defined by the research conducted by Origina and Thinkers50, consumes capacity, diverts talent, wastes working assets, and adds cost and risk to organizations.
Large enterprises are spending almost 30% of their software budget on upgrades, migrations, and licensing changes that they would not have chosen otherwise. Over the past three years, 95% of contributing IT leaders have funded vendor-driven upgrades, believing they would negatively impact performance, reliability, or business value.
The report highlights that while organizations implement ambitious software strategies for efficiency, they often impose hefty hidden costs upon themselves.
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