Vendor-driven upgrades consume nearly a third of IT budgets, survey reveals
A survey by Origina shows large U.S. and British firms allocate about 28% of software spending to vendor-mandated upgrades, dubbed a “software tax.”
A recent Origina study of more than 2,000 large U.S. and British companies finds that about 28% of their software budgets are devoted to vendor-initiated upgrades, migrations and licensing shifts that they did not actively select. The report labels these unavoidable expenses and the resulting operational disruption as a “software tax.” Ninety-five percent of participants said they paid for upgrades they expected to worsen outcomes, while 80% warned that leaving a major vendor would significantly disrupt their business.
Senior engineering staff often spend most of their time on mandated changes rather than innovation, and 91% have retired fully functional hardware to meet support deadlines, sacrificing an average of 1.65 years of useful life. The most recent vendor-driven change cost surveyed firms an average of $12.87 million annually. Origina CEO Tomas O'Leary said the issue is widespread, especially for older firms with entrenched technology stacks, and appears in other regions as well.
