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Tech Spending Is Back. And It May Even Last

After a somber 2009, the titans of technology are roaring back to life. Microsoft (MSFT), Dell (DELL), Oracle (ORCL), Adobe Systems (ADBE), and other major companies have all reported strong earnings or given robust sales guidance in recent weeks, buoying prospects for an industry that struggled through the recession. "The business trends are positive," SAP (SAP) Co-Chief Executive Officer Bill McDermott told Bloomberg News on June 23. "Our crystal ball looks good."

Technology is a cyclical business: Hardware and software upgrades are one of the first places companies cut costs. That means tech spending can snap back strongly when the economy improves. After falling by 4.2 percent in 2009, global tech spending is set to rise by 3.8 percent, to $1.5 trillion, this year, according to market researcher IDC.