But x86 server demand drives growth.
Factory revenues in the worldwide server market grew 6.3 percent year over year to US$13.1bn in the second quarter of 2007 led by strong demand for blades and x86 systems, new research reveals.
IDC's Worldwide Quarterly Server Tracker reported that this is the fifth consecutive quarter of positive revenue growth and the highest second-quarter revenue since the market peaked in 2000.
After three years of slowing growth, server shipments grew 6.1 percent year over year in the second quarter of 2007 driven by an improved refresh cycle and an expansion of new distributed computing workload deployments across the market.
The research reveals that volume x86 systems represented the "primary driver " for market growth during the quarter as revenue growth improved to 11 per cent year over year.
In contrast, revenue for midrange enterprise servers increased 0.2 percent year over year and the high-end enterprise server market showed a 1.7 percent increase year over year.
"The server market continues to experience solid growth, and revenue growth has accelerated over the past seven quarters," said Matt Eastwood, group vice president of enterprise platforms at IDC.
"Although x86-based systems are once again the primary driver for overall market growth, continued growth in other market segments demonstrates that a single standardised infrastructure is not capable of meeting the full range of needs in today's modern enterprise.
"Enterprise customers of all types continue to focus on driving business growth. This growth drives new computing demands, which increasingly require both scale-up consolidated systems and scale-out distributed configurations to meet very different workload needs in today's enterprise."
The server blade market showed signs of acceleration for the third consecutive quarter, as factory revenues grew 36.7 percent year over year.
Overall, blade servers, including x86, Epic and Risc blades, accounted for US$875m in the second quarter, representing 6.7 percent of quarterly server market revenue.
"Blade servers continue to be the fastest growing segment of the worldwide server market," said Jed Scaramella, research analyst in IDC's Enterprise Computing group.
"Customers are increasing their blade deployments and vendors are broadening the blades product portfolio.
"IDC believes that blades are in the next wave of product evolution and customer adoption.
"As IT organisations become more familiar with the platform, they are able to deploy blades in IT environments that are suited to take advantage of the management capabilities, as well as the cost and serviceability benefits."
IBM held onto its number one spot in the worldwide server systems market with 31 percent share in factory revenues for the second quarter of 2007, growing factory revenue by 6.4 percent year over year.
"This growth was driven by solid performance from Big Blue's System x, System z, and System p servers.
HP maintained the number two spot with 28.2 percent share for the quarter, growing revenue eight per cent compared to the second quarter of 2006. HP's growth stemmed from strong ProLiant server and BladeSystem performance.
Sun Microsystems grew server revenue 5.6 percent year over year and maintained the number three ranking with 13.1 percent factory revenue market share in the quarter.
Sun continues to experience strong demand for its T1000 and T2000 Niagara-based systems as well as its x86 offerings.
Dell experienced the most robust growth of any leading vendor despite remaining in the number four position in the market, growing factory revenue 20.2 percent year over year as its new enterprise strategy showed business progress.
In terms of platforms, Linux servers posted the fifth consecutive quarter of accelerating revenue growth, with year-over-year revenue growth of 19 percent to reach US$1.8bn in the quarter.
Linux servers now represent 13.6 percent of all server revenue, up from 12.1 percent a year ago.
Microsoft Windows server revenue was US$5bn in the second quarter, showing 18.7 percent year-over-year growth and gaining four points of revenue market share over the same period last year to record 38.2 percent of all server revenue in the quarter.