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EMC delivered a better-than-expected second quarter on Wednesday and raised its outlook amid strong demand for storage as data centers are upgraded. EMC expects IT spending to be up 3 percent to 5 percent in 2010.

The storage giant had earnings of $426 million, or 20 cents a share, on revenue of $4.02 billion. Non-GAAP earnings were 28 cents a share. Wall Street was expecting earnings of 27 cents a share on revenue of $3.98 billion.

EMC also raised its outlook. For 2010, the company said that it will top its previous projection for earnings of 84 cents a share on revenue of $16.5 billion. Non-GAAP earnings for the year will also be better than the $1.18 a share projected by EMC in April. Wall Street was expecting earnings of $1.20 a share on revenue of $16.6 billion.

In a statement, EMC CEO Joe Tucci said that spending on cloud computing infrastructure is driving demand. “The IT industry is in the midst of a major transformation to cloud computing and, ultimately, to a more agile way to consume and deliver IT,” he said.

Indeed, EMC has positioned itself for so-called private cloud adoption by forging alliances with Cisco (NASDAQ:CSCO), EMC and VMware (NYSE:VMW).

EMC is benefiting from an IT infrastructure upgrade cycle. Companies stopped IT investments in 2009 and the pent-up demand is paying off nicely for a wide range of technology giants.

The news comes a few hours after EMC subsidiary VMware reported a strong quarter. Here’s the breakdown of EMC’s revenue:

And the core EMC storage business.

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Source: EMC Raises Outlook, Rides Data Center Upgrade Wave