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

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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

By Reuters

Updated - October 20, 2026 at 09:58 AM.

Large US and British companies spend 28 per cent 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 per cent of respondents said they had paid ‌for a vendor-driven upgrade they expected ​to worsen outcomes, while 80 per cent said leaving a major software vendor ⁠would significantly disrupt their business
• 84 per cent said senior engineering staff "always" or "often" devoted time to vendor-mandated ‌software changes rather than innovation or business-focused development
• 91 per cent 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

Published on October 20, 2026

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