Digital Event Horizon
Enterprises are being drained of their resources due to software upgrades that they believe will harm their organizations. A recent survey found that 95% of respondents had paid for a vendor-driven upgrade in the past three years, and 53% had done so more than once. With little real leverage in negotiations, enterprises are forced to bear the costs of these upgrades, resulting in less funding for other areas.
Enterprise software upgrades cost large corporations an average of 28% of their software budgets. 95% of respondents had paid for a vendor-driven upgrade that they believed would harm performance or business value. Enterprises have little real leverage in negotiations with software vendors, with 76% saying they have little control over software budgets. The consequences of these upgrades can be far-reaching, with top technical workers occupied with upgrade cycles for a year. Policymakers are urged to consider laws that give enterprises "protections comparable with those available to long-term residential tenants" to address these issues.
Enterprise software upgrades have become a significant drain on the resources of large corporations, with many IT teams believing that these upgrades can actually harm the organization. According to a recent survey conducted by Origina, a third-party research consultancy, enterprises spend an average of 28% of their software budgets on unwanted upgrades, migrations, and licensing changes.
The survey, which polled 2018 chief information officers and senior IT decision-makers at companies with at least 10,000 employees, found that 95% of respondents had paid for a vendor-driven upgrade, migration, or licensing change in the past three years that they believed would reduce performance, reliability, or business value. Furthermore, 53% of respondents had done so more than once.
The study also revealed that enterprises have little real leverage in negotiations with software vendors, with 76% of respondents saying they have very little control over software budgets. Additionally, 80% of respondents stated that moving away from major vendors would cause significant disruption.
Origina's CEO and founder, Tomás O'Leary, noted that "when the alternative to an unwanted upgrade is losing support on systems the business runs on, saying yes is often a rational response." However, this lack of leverage results in less funding for other areas, particularly innovation, human resources, security, and customer-facing investment.
The consequences of these software upgrades can be far-reaching, with top technical workers being occupied with upgrade cycles for the better part of a year. As James McGlennon, CIO of Liberty Mutual, pointed out, "that's not a one-off cost, it's a recurring drag on capacity, and every year it repeats is a year those people aren't working on the initiatives that actually differentiate the business."
To address these issues, Origina's report suggests that CIOs should "negotiate the exit before the entry" to have more control over software budgets. This includes setting a price for migration assistance and caps on renewal and expansion prices during initial negotiations with the software vendor.
The report did not identify specific vendors as forcing enterprises' hands, but it did note that every survey respondent currently runs at least one of IBM, HCL, VMware/Broadcom, or SAP at meaningful scale.
In light of these findings, policymakers are being urged to consider laws that give enterprises "protections comparable with those available to long-term residential tenants." With 91% of respondents supporting such laws, it is clear that the issue of software upgrades and their impact on enterprise budgets and IT negotiations is a pressing concern.
Related Information:
https://www.digitaleventhorizon.com/articles/The-Unseen-Cost-of-Software-Upgrades-A-Study-on-Enterprise-Budgets-and-IT-Negotiations-deh.shtml
https://arstechnica.com/information-technology/2026/10/survey-enterprises-waste-28-percent-of-software-budgets-on-unwanted-upgrades/
https://ccstartup.com/blog/2026/10/21/enterprises-keep-buying-software-upgrades-that-it-thinks-will-make-things-worse/
Published: Wed Oct 21 19:46:49 2026 by llama3.2 3B Q4_K_M
