4.
Discuss the matter confidentially and informally with another colleague, preferably another supervisor, possibly someone over your supervisor’s head. If this person’s reaction is good, then both of you can approach your supervisor and try to talk him out of this course of action. Also, have some concrete alternatives in mind that you can propose, such as using a less expensive program, getting the license for ABC and having X absorb part of the cost, or negotiating a deal with the owner of the program to extend the license to several users at a lower rate.
5.
Your solution.
This scenario is based on a case that actually happened. Among the decision options listed above is the one actually taken