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

By Thomson Reuters Oct 19, 2026 | 11:09 PM

By Anastasiia Kozlova

Oct 20 (Reuters) – 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 AI solutions, a survey by 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,” Origina CEO 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-mandated 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 ⁠stacks facing 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)