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

(Specifies wording in 2nd bullet point to say to "vendor-driven" instead of "vendor-mandated")

By Anastasiia ​Kozlova

Oct 20 (Reuters) - Large US and British companies spend 28% of their software budgets on average to pay for ‌vendor-driven upgrades, migration and licensing changes they would not have actively chosen, adding ⁠avoidable costs and operational ​risks in the race to adopt ⁠AI solutions, a survey by software maintenance provider Origina showed ‌on Tuesday.

These hard-to-avoid ‌recurring costs and operational disruption were described as a "software ⁠tax" in the study that ⁠surveyed more than 2,000 companies. "When the alternative to an unwanted upgrade is losing support on systems the business runs on, saying yes is often a rational response," Origina CEO Tomas O'Leary said.

• 95% of respondents said they had paid ‌for a vendor-driven upgrade they expected ​to worsen outcomes, while 80% said leaving a major software vendor would significantly disrupt their business

• 84% said senior engineering staff "always" or "often" devoted time to vendor-driven software changes rather than innovation or business-focused development

• 91% said they had retired fully functional hardware in the past three ​years to comply with vendors' support deadlines, sacrificing 1.65 years ‌of remaining useful ‌life ⁠on average

• O'Leary said the issue was largely universal and also applied to other regions, with older companies with more entrenched technology stacks facing the biggest challenges

• According to the report, ‌the most recent vendor-driven ​software change resulted in an ‌average annual cost ⁠of $12.87 million ​for the surveyed organizations

(Reporting by Anastasiia Kozlova in Gdansk, editing by ​Milla Nissi-Prussak)

Related topics