Enterprise-sized businesses dedicate an average of 28 percent of their total software budgets to upgrades, migrations, and licensing changes they do not want—capital that otherwise flows to innovation, security, and other priorities.
These findings come from "The Software Tax," a report by Origina based on a survey of 2,018 chief information officers and senior IT decision-makers at companies with at least 10,000 employees and annual revenues exceeding $1 billion. Respondents were split between the U.S. and the United Kingdom.
Ninety-five percent of respondents said their company paid for a vendor-driven change in the past three years that they anticipated would harm performance, reliability, or business value. More than half reported making such a payment more than once, indicating a recurring cycle.
The root cause: vendor lock-in. Seventy-six percent of respondents agreed their organizations hold "very little real leverage" in negotiations with major software vendors. Eighty percent stated that transitioning away would cause "significant disruption" to their operations—a dynamic that leaves IT leaders with few options.
"When the alternative to an unwanted upgrade is losing support on systems the business runs on, saying yes is often a rational response," said Tomás O'Leary, Origina's CEO and one of the report's authors. He noted that the market structure forces experienced technology leaders to accept budget drains, consuming engineering time and crowding out unfunded innovation.
The impact cascades across enterprise priorities. Innovation ranked as the most affected area, named by 36 percent of respondents. Security (31 percent), human resources (32 percent), and customer-facing investments (31 percent) followed.
James McGlennon, a former CIO and global EVP at Liberty Mutual, put the cost in concrete terms: an upgrade can occupy top technical workers for "the better part of a year"—a recurring capacity drag that prevents staff from working on initiatives that differentiate the business.
The appetite for relief is overwhelming. Ninety-one percent of surveyed IT leaders would support laws offering enterprises "protections comparable with those available to long-term residential tenants." Only 1 percent opposed such legislation.
Origina, which provides third-party maintenance for enterprise software, positions independent software maintenance as a way for IT leaders to reclaim budget control and escape vendor-dictated change cycles.
