Large enterprises are spending nearly a third of their software budgets on upgrades, migrations, and licensing changes that their own IT leaders believe are detrimental, according to a survey of 2,018 chief information officers and senior IT decision-makers at companies with at least 10,000 employees and $1 billion in annual revenue. The survey, conducted by Censuswide for software maintenance firm Origina, found that 95 percent of respondents had paid for a vendor-driven change in the past three years that they believed at the time would reduce performance, reliability, or business value. More than half (53 percent) said their organization had done so more than once.
The findings point to a market dynamic in which large customers have little room to refuse. Seventy-six percent of respondents said their organization has very little real leverage in negotiations, and 80 percent said moving away from major vendors would cause significant disruption. As Origina CEO Tomás O'Leary put it, when the alternative to an unwanted upgrade is losing support on systems the business runs on, saying yes is often a rational response. The cost shows up in budgets, engineering time, and innovation that never gets funded. Liberty Mutual CIO James McGlennon noted that an upgrade cycle can occupy top technical workers for the better part of a year, a recurring drag on capacity.
The report suggests that CIOs should negotiate the exit before the entry, settling terms such as migration assistance pricing and caps on renewal and expansion prices during initial vendor negotiations. It also found strong appetite for regulatory intervention: 91 percent of respondents would support laws giving enterprises protections comparable to those available to long-term residential tenants, with only 1 percent opposed. Notably, the survey was commissioned by Origina, which sells independent software maintenance, so its recommendations should be read with that bias in mind. The report did not name specific vendors, but every respondent runs at least one of IBM, HCL, VMware/Broadcom, or SAP at meaningful scale.