Software upgrades eat nearly a third of companies' IT budgets, survey finds
XLK•Large U.S. and British companies spend an average of 28% of their software budgets on vendor-driven upgrades, migrations and licensing changes they would not have chosen, a survey of more than 2,000 companies found. Respondents said the changes also consume engineering time and can require retiring working hardware.
1. Recurring software costs
Large U.S. and British companies spend an average of 28% of their software budgets on vendor-driven upgrades, migrations and licensing changes they would not have actively chosen, according to a survey by software maintenance provider Origina. The study described the recurring costs and operational disruption as a “software tax.”
2. Operational disruption
In the survey, 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. The most recent vendor-driven software change cost surveyed organizations an average of $12.87 million annually, the report said.
3. Time and hardware costs
Some 84% said senior engineering staff “always” or “often” spent time on vendor-mandated changes instead of innovation or business-focused development. Also, 91% said they had retired fully functional hardware in the past three years to meet vendor support deadlines, giving up an average of 1.65 years of remaining useful life.
