Survey: Large Companies Spend 28% of Software Budgets on Unwanted Upgrades
A survey of senior IT leaders at large firms found that, on average, 28% of software budgets go to unwanted upgrades, migrations and licensing changes. The survey's sponsor sells software maintenance services itself, so its findings may be biased.
Companies with at least 10,000 employees spend an average of 28% of their software budgets on upgrades, migrations and licensing changes they do not really want. IT leaders themselves often believe these changes make things worse. The findings come from a report called "The Software Tax," produced by Origina, a company that provides maintenance for various kinds of enterprise software.
How the survey was done
The survey covered 2,018 chief information officers and other senior IT decision-makers at firms with at least 10,000 staff and at least $1 billion in annual revenue. About half of the respondents (1,011) are based in the United States, and the rest in the United Kingdom. The research consultancy Censuswide carried out the fieldwork.
It is worth noting that Origina's report presents independent software maintenance as a way to regain control over software spending, so the results may reflect a degree of self-interest.
Main findings
According to the report, 95% of respondents said their organization had, in the past three years, paid for a vendor-driven upgrade, migration or licensing change that it believed at the time would reduce performance, reliability or business value. Some 53% had done so more than once.
In addition, 76% said their organization has very little real leverage in negotiations, and 80% said moving away from major vendors would cause significant disruption. These figures combine answers of "strongly agree" and "somewhat agree."
Comment from the report's author
Tomás O'Leary, Origina's CEO and founder and one of the report's authors, said in a statement that when the alternative to an unwanted upgrade is losing support on systems the business relies on, saying yes is often a rational response. In his view, that is the heart of the problem: the market has left experienced technology leaders with little room to refuse, and the cost appears in budgets, in engineering time and in innovation that never gets funded.
