Corporate spending boosts tech majors

Seattle: Corporate spending on computers and software gathered steam last quarter, bolstering sales and profit at Microsoft, Intel and International Business Machines.

Results from all three companies this week surpassed analysts' predictions, with Microsoft saying on Friday that sales climbed to $17.4 billion in its fiscal fourth quarter. That topped the $17.2 billion average estimate of analysts. Intel's revenue forecast for the current quarter, released a day before, as well exceeded projections.

Companies are replacing aging desktop machines and equipping data centres to deliver computing over the internet, via the so-called cloud. That's fuelling demand for new versions of Microsoft programs for businesses, more powerful chips from Intel and research services provided by IBM.

IBM's second-quarter revenue, reported on Monday, topped predictions. Other innovation companies as well have benefited from increased spending by businesses. Google Inc., the biggest Web-search company, said last week that ad prices are up because companies are more willing to spend to market online.

Microsoft, the world's largest software maker, said companies are snapping up copies of Windows 7, Office software, and programs tailored for servers — the powerful machines that outfit data centres.

The current period

Unearned revenue — which comes from multiyear contracts that isn't recognised in the current period and indicates future sales — was as well higher than analysts projected. That figure was $17.1 billion, above the average estimate of $15.6 billion, according to Bloomberg data.