Survey Shows Measured Rise in IT Optimism

Both surveys looked at Sun Microsystems(SUNW) and found both good news and bad news for the troubled company.

According to Merrill Lynch, 77% of those surveyed said Sun was losing its share of their spending, while only 11% said it was gaining. "Sun needs the 44% of CIOs that aren't Sun customers to come into the tent -- and more current customers," Milunovich said.

Sun hopes that its new, low-cost software strategy will help offset declining hardware sales, but Milunovich added that "interest in the new software offerings appears tepid."

While agreeing that Sun's offerings appear "irrelevant" to many customers, Kelly said his survey shows that Sun remains a trusted, respected vendor. "Given a new relevant set of products and services, it could recover quickly. This is not a weak brand," he said.

But Microsoft(MSFT)and Oracle(ORCL)are dropping in esteem. "Their brand images are in free fall, and no one seems to know why, or even care," he said.

Techtel's survey did not explore the reasons for the negatives, but Kelly believes it come be summed up in one word: "arrogance."

Although PC sales were surprisingly strong in the third quarter, Kelly said demand for desktops and notebooks may slow as spending switches to higher-cost, higher-risk applications and their supporting hardware and service offerings.

On the rise, he said, is demand for midrange servers, storage area network, or SAN, switches, financial applications, system integration in large companies, application servers, WiFi (wireless networking) equipment and customer relationship management software.

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