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


Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration

(Specifies wording in 2nd ⁠bullet point to say to "vendor-driven" instead of "vendor-mandated")

Oct ⁠20 (Reuters) - LargeUS 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 ​inthe race to adopt AI solutions, ⁠a surveyby 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,"OriginaCEO Tomas O'Leary said.

• ⁠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

• 84% ​said senior engineering staff "always" or "often" devoted time to vendor-driven software changes rather than innovation or business-focused development

• 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 stacksfacing 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

(Reporting by Anastasiia Kozlova in Gdansk, editing by Milla Nissi-Prussak)

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