"Often, companies don’t believe in using a product unless they have to pay for it, usually a lot."

For enterprises, the license cost of a product is a small part of the equation. Maintenance and support (billed annually) is really what they're interested in.

And don't forget that the more that someone's paid for something, the more willing they are to scream bloody murder until whatever issue (they think) they're having is fixed.

I've worked with this before. At a previous startup I was the only startup member that had deployed a significant web application. I had always used the FreeBSD platform. We deployed on Windows Server 2003 because despite my personal experience and the ability to pay for FreeBSD support the powers that be were nervous. At the end of the day 'you don't get fired for buying Microsoft' won the day.

As you can see, this wasn't a healthy startup environment to be in where fear wins over experience.

This is not as irrational as it sounds. In our own personal lives, we make decisions like this. As an example, I haven't in recent memory visited a ultra-cheap ethnic restaurant (though I go to more expensive places), because I am worried about their health standards. I am using price as a signal of quality - which is reasonable in a perfectly competitive market, but alas, if a lot of people act like me, the "perfectly competitive market" assumption may not hold. In other words, this "price signals quality" thesis itself depends on people evaluating quality first, and then the market sorts itself out based on quality. But if people start acting en masse on the price-signals-quality assumption, it stops signaling quality.

So this is a perpetual tension (or a perpetual self-referential loop!) that means there are going to be overlooked bargains in the market. In case of restaurants, I am just not that motivated to find them.

I can imagine enterprises feeling that way about IT.

In a similar vein, placebos work better when they are more expensive.