U.S. and UK companies face software upgrade costs across IT budgets, Origina survey finds

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US & UK software upgrade costs

Highlights

Companies reported that 28% of their software budgets are spent on upgrades, migrations, and licensing changes imposed by major vendors.
Origina's survey found the average annual cost of the most recent vendor-driven software change was $12.87 million per organization among 2,000+ respondents.
91% of organizations retired usable hardware with 1.65 years of life remaining in the past three years due to vendor support deadlines.

Survey findings on vendor-driven software costs

As reported by Reuters, citing Origina, companies surveyed said an average 28% of their software budgets goes toward upgrades, migration requirements and licensing changes imposed by major vendors rather than selected by the businesses themselves.

The software maintenance provider surveyed more than 2,000 companies and described these recurring expenses and disruptions as a "software tax." Origina CEO Tomas O'Leary said agreeing to an unwanted upgrade is often a rational decision when the alternative is losing support for systems that are critical to business operations.

Among respondents, 95% 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. The report also said the most recent vendor-driven software change carried an average annual cost of $12.87 million for the organizations surveyed.

Operational impact on technology teams and infrastructure

Beyond direct spending, the study points to pressure on engineering resources and hardware life cycles. About 84% of respondents said senior engineering staff always or often spend time on vendor-mandated software changes instead of innovation or development tied more closely to business needs.

The survey also found that 91% had retired fully functional hardware in the past three years to meet vendors' support deadlines, giving up an average of 1.65 years of remaining useful life. O'Leary said the problem is largely universal across regions, with older companies running more entrenched technology stacks facing the biggest difficulties.

In our earlier article on HeiTech Padu’s MyIMMs maintenance contract extensions in Malaysia, we covered how the government prolonged support for the legacy immigration system while transitioning to the new NIISe platform. We noted that repeated renewals were intended to keep critical services running during the rollout, underscoring how large-scale systems can lock organizations into ongoing maintenance spend and timeline-driven technology change.

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