Software upgrades eat nearly a third of companies’ IT budgets, survey finds
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Vendor-driven upgrades can add costs and operational risks for information technology companies in the AI race.
PHOTO: REUTERS
- A survey by Origina found large US and British firms spend 28% of software budgets on vendor-driven upgrades, migrations and licence changes they did not choose.
- The study said 95% paid for upgrades they expected to worsen results, while 80% feared leaving a major vendor would disrupt business.
- Companies also lost time and money: 84% of senior engineers worked on forced changes, and the latest change cost US$12.87 million a year on average.
AI generated
Large US and British companies spend 28% 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 artificial-intelligence solutions, a survey by software maintenance provider Origina showed on Oct 20.
These hard-to-avoid recurring costs and operational disruptions 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 chief executive Tomas O’Leary said.
The report showed 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. Another 84% said senior engineering staff “always” or “often” devoted time to vendor-driven software changes rather than innovation or business-focused development.
Some 91% 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 US$12.87 million (S$16 million) for the surveyed organisations. REUTERS