Rise in demand for cloud computing services has helped IT firms to post satisfactory financial report cards, indicating that the economy is indeed bouncing back on increased IT spending.
According to a report on Bloomberg (opens in new tab), Intel and IBM had posted better-than-expected financial results, riding high on the rise of IT spending by companies eager to upgrade their IT systems and equip themselves with gear that lets them deliver cloud computing services.
Other key IT vendors like VMware, Juniper and EMC succeeded in meeting analysts forecast, indicating at a recovering economy, as company hurry to build data centres that let them deliver services over the internet.
Companies had drastically cut their spending on new hardware and software after the market had plunged into recession, resulting in low sales and subsequently a poor financial performance from companies like Intel, IBM and Microsoft.
According to recent analyst estimates, cloud computing is expected to double to $148.8 billion in 2014 from $58.6 billion in 2009. The technology is being used in almost every sphere be it education, medicine, media, business software and desktop virtualisation.
“The product replacement cycle is finally occurring after the downturn of 2008. The earnings in all of these companies reflect the fact that businesses are spending again,” an analyst told Bloomberg.