Software renewals: when saying yes costs you twice

The letter lands during budget lock: end of support in twelve months, a new licence bundle, a move to a cloud offer if you want patches. Your IT lead knows there is no team and no window for another project — but saying no means running without a safety net. That is not a moody IT department: it is what happens when the vendor takes the wheel after the contract is signed.

What the “Software Tax” study measures

In mid-October 2026, Origina (third-party support for IBM, HCL, VMware, SAP) publishes a Thinkers50 report on the “software tax”: vendor-driven change once a system is embedded. Censuswide fieldwork ran 11–19 May 2026 among 2,018 IT decision-makers at very large US and UK organisations running IBM, HCL, VMware/Broadcom, or SAP at scale. Authors estimate 28% of software budget on average goes to changes they would not have chosen; the latest imposed change averaged $12.87 million in that sample — a big-company order of magnitude, not your SMB’s invoice, but the mechanism is the same.

Paying while expecting to lose

95% say they funded at least one change in three years they believed would worsen performance, reliability, or business value; more than half did so more than once. 78% feel the vendor, not their organisation, sets timing and terms; 76% report little leverage in renegotiation. As Origina CEO Tomás O’Leary puts it in press coverage: when refusing an upgrade means losing support on what runs the business, yes is often the rational answer.

The bill leadership does not see at first

Beyond the licence line, respondents describe a second bill: budgets raided — 36% cite innovation, 32% hiring, 31% security. 84% say top engineers are often tied up on these programmes instead of the business; 91% retired hardware that still worked to meet a support deadline, giving up an average of 1.65 years of remaining life. For an SMB the numbers are smaller; the pattern is two delayed projects, a postponed security review, a hiring freeze.

• Before signing: third-party maintenance rights, notice before end of support, price-cap language, documented data export — the report’s “negotiate exit before entry”.
• During the contract: map dependencies (integrations, training, data) to price what refusal really costs.
• At each renewal: who benefits from the imposed change — and put finance and legal at the table, not IT alone.

If a software renewal is landing this quarter and the room to manoeuvre feels zero, we can walk through the contract and timeline on one page — before defaulting to yes.