New research from Origina, published in a report with Thinkers50, examines the economics of the "Software Tax": a recurring burden embedded in the enterprise software model that consumes capacity, diverts talent, wastes working assets and adds cost and risk that organizations have little practical ability to refuse.
95% of IT leaders surveyed say their organization has paid for a vendor-driven upgrade, migration or licensing change in the past three years that it believed would reduce performance
The most recent vendor-driven change cost large enterprises an average of $12.87 million, and 80%1 of IT leaders surveyed say moving away from a major software vendor would cause significant business disruption
Asked about the last time an AI or data program was slowed, paused or canceled, 34% of respondents said vendor-driven costs had a major contribution to that decision; 56% said it had a moderate one.
DUBLIN, Ireland — 20 October 2026 — Large enterprises say they spend an average of 28% of their software budgets on upgrades, migrations and licensing changes they would not have actively chosen, according to new research from Origina, an independent software maintenance partner supporting business-critical enterprise systems, published in a report with Thinkers50. The research also found that 95% of IT leaders say their organization has paid for a vendor-driven upgrade in the past three years that it believed would reduce performance, reliability or business value, and more than half (53%) have done so more than once.
The Software Tax, What does it cost, and who benefits?, the report built on the survey, links this pattern to how little practical ability these leaders have to refuse upgrades and changes once a system is embedded in the business.
The most recent of these vendor-driven changes cost respondents' organizations an average of $12.87 million, and the impact reaches well beyond the IT budget. Innovation was the budget respondents most often said was hit, with hiring and security close behind. When asked about the last time an AI or data program was slowed, paused or canceled, 34% of respondents said vendor-driven costs had a major contribution to that decision; 56% said it had a moderate one.
The survey of 2,018 senior IT decision-makers in the US and UK, conducted by Censuswide, shows how little room buyers have:
78%1 agree that their primary vendor, rather than their own organization, sets the timing and terms of change.
76%1 say they have very little real leverage in negotiations with major vendors.
80%1 say moving away from a major software vendor would cause significant business disruption.
1 Combines ‘strongly agree’ and ‘somewhat agree’
Tomás O'Leary, CEO and Founder of Origina and co-author of The Software Tax, said, “When the alternative to an unwanted upgrade is losing support on systems the business runs on, saying yes is often a rational response. That's exactly the problem. The market has left some of the most experienced technology leaders in the world with little room to refuse, and that cost shows up in budgets, in engineering time and in innovation that never gets funded. We want to make that cost visible so customers can start to take back control of it.”
People and hardware are affected too, according to respondents. Some 84% say senior engineering talent "always" or "often" spends time on vendor-driven upgrades rather than building future capability. Ninety-one percent report they have scrapped functional hardware in the past three years purely to meet a software vendor's support deadline, losing an average of 1.65 years of useful hardware life.
"At the scale we were operating, a single upgrade cycle could occupy some of our strongest technical people for the better part of a year,” noted James McGlennon, former CIO of Liberty Mutual and a member of Origina’s board. “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."
IT leaders surveyed also back changes to the rules. More than nine in ten (91%2) would support legislation giving enterprise software customers protections comparable with those in long-term residential rental relationships. And 82%1 support software-support requirements similar to those placed on hardware manufacturers under EU rules on hardware repairability.
Marshall Van Alstyne, Professor at Boston University and co-author of The Software Tax said, “Economists have studied this problem for decades: once a customer makes relationship-specific investments, the vendor gains leverage that no contract can fully anticipate. For CIOs, the lesson is simple: negotiate the exit before the entry. You don’t have to leave a vendor to benefit from being able to.”
The full report, The Software Tax, sets out practical steps IT leaders can take to negotiate their way out of lock-in, from more modular software architecture to contracts that address foreseeable decisions before the customer is committed. Read it here.
About Origina
Origina has been recognized by Gartner every year since 2019 as an independent software maintenance partner serving over 200 of the world's largest enterprises across IBM, HCL, VMware, and SAP platforms. Origina was founded to challenge the traditional software model and shift control back to the customer. origina.com
About Thinkers50
Founded in 2001 by business journalists Des Dearlove and Stuart Crainer, Thinkers50 began as the first global Ranking of Management Thinkers. Over the past quarter century, it has grown into a worldwide platform and a vibrant Community. Today, Thinkers50 encompasses the Thinkers50 Distinguished Achievement Awards alongside the Hall of Fame, Radar, Coaching Legends, Leaders50, Coaches50, and curated Booklists. The Thinkers50 London Summit & Awards Gala has been described by the Financial Times as the “Oscars of management thinking.”
Notes To Editors:
Software Tax is used as a figurative term to describe the recurring burden embedded in the enterprise software model that consumes money, time, talent and resources, that organizations have little practical ability to refuse. It does not refer to a government-imposed tax.
Media contact
Fight or Flight PR: Origina@fightorflight.com
Methodology
The research was commissioned by Origina and conducted by Censuswide. It surveyed 2,018 CIOs and senior IT decision-makers at director level or above, with ownership or direct influence over enterprise software budgets and renewal decisions, at organizations with annual revenues of $1 billion or more or with 10,000 or more employees globally. All respondents currently run at least one of IBM, HCL, VMware/Broadcom or SAP at meaningful scale. The sample was split across the United States (1,011 respondents) and the United Kingdom (1,007), spanning five sectors: financial services, insurance, telecommunications, public sector and retail. Fieldwork was conducted between 11 and 19 May 2026. Censuswide is a member of the Market Research Society (MRS) and the British Polling Council (BPC), and a signatory of the Global Data Quality Pledge. We adhere to the MRS Code of Conduct and ESOMAR principles.