Spending Surveys Slight Tech Rally Hopes

What's more, the CIO of Kaiser said the quality of software is now "abysmal," and the Lockheed executive said problems in his company's systems had skyrocketed in the last two years.

Asked in the Goldman survey which companies are gaining share of companies' technology dollars, the IT managers listed SAP(SAP Quote - Cramer on SAP - Stock Picks), Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks), Symantec(SYMC Quote - Cramer on SYMC - Stock Picks) and Red Hat(RHAT Quote - Cramer on RHAT - Stock Picks) as the biggest winners, while Computer Associates(CA Quote - Cramer on CA - Stock Picks) and BEA Systems(BEAS Quote - Cramer on BEAS - Stock Picks) were the biggest share losers.

CA's loss may have been partially because of more competitive pricing, with customers asking for better deals but not necessarily jumping to rival vendors, the analysts wrote. But BEA, which saw its share in the survey decline for the first time, is apparently losing ground to its rivals.

"Checks with channel partners and large [system integrators] point to BEA's ongoing issues in competing effectively against the large platform vendors such as IBM(IBM Quote - Cramer on IBM - Stock Picks), Oracle(ORCL Quote - Cramer on ORCL - Stock Picks), and increasingly SAP," they said.

What to do in the meantime? The Goldman analysts picked five names (in hardware, software and services) that they say are trading at "temporarily depressed valuations": Accenture(ACN Quote - Cramer on ACN - Stock Picks), EMC(EMC Quote - Cramer on EMC - Stock Picks), Research In Motion(RIMM Quote - Cramer on RIMM - Stock Picks), SAP and Satyam Computer Services(SAY Quote - Cramer on SAY - Stock Picks). Goldman has investment banking relationships with Accenture, EMC, Research In Motion and SAP.

Another survey question contained good news for software vendors with broad offerings, and bad news for the "best of breed" bunch, i.e., companies whose software is narrowly focused. Half the managers said they are looking to reduce the number of vendors with whom they deal, including 10% who expect the reduction to be dramatic, while just 7% said they expect to expand the number of vendors with which they do business.

Those findings support the notion that companies like Oracle, SAP and IBM, which provide well-developed software infrastructure, will thrive, while point players, even large ones like BEA or Siebel Systems(SEBL Quote - Cramer on SEBL - Stock Picks), will continue to struggle, and may even be gobbled up for their technological expertise and customer base.

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