Unwanted software upgrades cost enterprises billions

A new study by Origina, an independent software maintenance company, shows that about 28 percent of large enterprises' software budgets are spent on unwanted upgrades. These upgrades, often mandated by suppliers, lead to recurring costs that take time away from engineers and reduce funding for innovation and cybersecurity.

Respondents pay for upgrades despite negative expectations

According to the survey, 95 percent of the IT managers surveyed said they had paid for an upgrade even though they expected it to worsen their results. Meanwhile, 80 percent said leaving a major software publisher would greatly disrupt their operations, highlighting the dependency on these vendors.

Survey targets large enterprises globally

The study focused on companies with at least 10,000 employees, with about half of the 2,018 respondents from the United States and the rest from the United Kingdom. All worked for companies with annual revenues of at least one billion dollars. Respondents reported decommissioning fully functional equipment to meet supplier support deadlines, losing an average of 1.65 years of useful life.

Founder calls the issue a 'software tax'

Origina's founder and CEO, Tomás O'Leary, described the issue as a "software tax" that can worsen the state of computer systems. He noted that the scale of this tax surprised him, though he had expected that forced upgrades would lead to significant costs for enterprises.

Forced changes delay AI and data projects

The survey found that imposed software changes often delay or halt AI and data projects. When asked about the last time such a project was delayed, suspended, or canceled, 90 percent of respondents said costs from publishers had at least a moderate impact. James McGlennon, CIO at Liberty Mutual, said these costs are recurring and limit opportunities for innovation.

Respondents lack negotiation power

About 76 percent of respondents said they have little power to negotiate with their main software publishers. O'Leary explained that the market has left experienced technology managers with few options, leading to budget cuts, wasted engineering time, and unfunded innovation efforts.

Call for legislative action

Respondents are urging lawmakers to create regulations that protect enterprise software users. About 91 percent supported legislation giving them protections similar to those of long-term residential tenants, while 82 percent backed rules for software maintenance akin to the EU's hardware repair standards.

Experts suggest proactive negotiation strategies

Experts like Professor Marshall Van Alstyne recommend that IT managers negotiate exit terms before entering contracts with publishers. This involves setting conditions for migration assistance upfront to avoid future financial and operational burdens.