Sarbanes-Oxley spending is high on CIOs' priority lists this year, according to Merrill Lynch's most recent TechStrat Survey. Two-thirds of the CIOs responding to the survey reported that Sarbanes-Oxley will impact their spending for the year, with 46 percent confirming that it will lead to more spending in that area, especially for security and documentation software.

CIOs also reported that spending on servers was accelerating, but indicated that virtualization will eventually slow server spending as it becomes more widely used. As for hot technologies, CIOs said they are interested in wireless, VoIP, RFID, virtualization, grid computing and biometrics. On the VoIP front, CIOs reported that roughly 7 percent of their phones are VoIP today, but they expect that to rise to 34 percent in two years.

"Growth in tech is centered in wireless and Internet applications," according to the report, which also states, "VoIP uptake looks ready to explode."

On the software side, security, database and storage management were the three products CIOs reported they would be buying more of this year. Conversely, they indicated spending less on ERP and desktop-applications software. Which vendors are gaining shares within CIO respondents' companies? Microsoft, SAP, Oracle and IBM, the report found.

Finally, when asked about Microsoft's upcoming Longhorn operating system, CIOs said security, integration/workflow, search, storage management and graphics/performance were the main benefits they expected. What's more, nearly 50 percent of the CIOs think that Longhorn will create a PC-upgrade cycle.