It's the time for earnings report calls. And as IBM (news, site) posts US$ 26.7 billion in quarterly revenue, we learn that much of the 15% nominal increase over the same quarter last year was from operations in growth markets, as well as software and services like cloud computing.

IBM has reported revenue of US$ 26.7 billion for the second quarter of 2011, up from US$ 23.7 billion in the same period last year. Net income also rose from US$ 3.4 billion in Q2 2010 to US$ 3.7 billion during Q2 2011.

Software and Services

Revenue from IBM Software and IBM Systems and Technology Group increased by 17% over last year's. At US$ 6.2 billion in 2Q 2011, this includes US$ 3.9 billion from key middleware products, including WebSphere, Information Management, Tivoli, Lotus and Rational.

IBM's service segments grew 10% from US$ 13.59 billion in Q2 2010 to US$ 15.1 billion this 2nd quarter of 2011. This includes revenue from IBM Global Technology Services and IBM Global Business Services. Revenue from cloud-related services actually grew more than 200%.


Meanwhile, the company's hardware revenues total US$ 4.7 billion, which is a 17% increase from Q2 2010 figures. CFO Mark Loughridge says that the company's strategy for investing in growth-markets is paying off, with much of the growth being driven by branded middleware, including System z, and Power and System x servers. This accounted for a 24% increase in hardware sales, with WebSphere providing the key underlying infrastructure capabilities.

Since we announced our growth-markets unit in the beginning of 2008, the revenue growth rate has outpaced the major markets by an average of 9 points, on a local currency basis. With 13 percent revenue growth, this is the fourth consecutive quarter of double-digit revenue growth and share gains.

Overall, IBM overcame estimates for its 2Q 2011 earnings, with earnings-per-share increasing 18% to US$ 3.09. With these figures, the company has raised the company's full-year GAAP diluted EPS to at least US$ 12.87 (up from US$ 12.73), and raised expectations of operating EPS to US$ 13.25 per share.

IBM's performance is generally seen as an indicator of how the technology industry at large is performing. With these figures, analysts foresee investor confidence in cloud services, business intelligence and growth-market activities.