Worldwide sales of server systems rose 17.5% in the second quarter of this year - halting a nine-quarter decline, according to market research firm IDC's Worldwide Server Tracker.
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Users may have been tempted by competitive pricing with IDC noting that average selling prices dropped significantly. IDC noted that manufacturers revenues were up just 0.2% compared with the same quarter last year, at $10.2bn (£6.49bn).
The market for Linux-based servers grew at 39.5% year on year to reach $650m, while blade server revenue reached $119m, up almost eight times than in the second quarter of 2002.
IBM took over from Hewlett-Packard as the leading server supplier overall with 10.1% year-on-year revenue growth compared with HP's 0.4% growth.
Although HP leads IBM in each of the three main Intel-standard, Unix and Linux markets, IBM has considerable sales from proprietary server hardware such as the iSeries, making it the overall market leader.
Sun Microsystems saw sales fall by 18.7% over the year and is being challenged for its third position by Dell, whose sales grew 10% over the year, according to IDC figures.
However, IDC said HP retained its revenue lead in the Linux server and Windows server markets, followed by Sun Microsystems, Dell and Fujitsu Siemens.
The x86 server market (comprising systems based on microprocessors from Intel and Advanced Micro Devices) grew more than 21% year on year in terms of unit shipments and was up 9% in terms of revenues.
IDC said the numbers show strength in the sale of servers priced at less than $25,000, reflecting continued momentum in small and midsized business segments and demand in departmental and workgroup environments at larger enterprises.
There were also signs of slow, but steady replacement of servers purchased in 1999 and 2000 - when the worldwide server market posted record revenues.
"The Unix server segment is the single largest slice of the entire worldwide server market, with more than 40% of the revenue share in 2Q03," said Lloyd Cohen, research director of Global Enterprise Server Solutions at IDC.
"Unix systems, along with the associated software and services tied to these solutions, continue to drive much of the overall enterprise IT spending."
Linda Rosencrance writes for Computerworld