Dell snaps at Sun's heels as quarterly sales hit $12.2bn
Sales of servers grew by 5.6 per cent in the most recent quarter to $12.2bn, according to a new study from analyst firm IDC. This marked a ninth consecutive quarter of growth for the server market.
Improvements centred around so-called volume servers, inexpensive industry standard models often powered by x86 processors made by Intel or AMD.
Volume server sales increased by 11.1 per cent year-over-year, and midrange servers showed a 4.3 per cent sales increase. Sales of high end systems, however, which include mainframes, shrunk by three per cent.
Server sales increased across all operating systems. Linux systems led the pack with 45.1 per cent revenue growth, although its 11.5 per cent share of the overall market remains small relative to Windows and Unix systems.
Windows grew 14.3 per cent, claiming 33.5 per cent of all server sales. Unix remained king with 35.2 per cent share, despite a meagre sales increase of 2.5 per cent.
IBM held on to the lead in the overall server market in terms of revenues, claiming a share of 31.9 per cent. HP followed with 28.5 per cent.
Sun Microsystems and Dell recorded 11.3 and 10.5 per cent market share respectively, but Dell keeps closing on its rival.
Rival analyst firm Gartner showed a similar picture earlier in the week, pegging overall server sales at $12.1bn, an increase of 4.7 per cent year-over-year.
Although the two analyst firms often show different pictures in their figures, they do agree on general trends and shifts in market share.
An Intel spokesperson confirmed Thursday that Dell would no longer be offering servers with Intel Itanium CPUs.  The spokesperson said "Losing Dell as an Itanium customer is unfortunate but frankly, we see their impact as negligible."  Servers with Itanium CPUs are no longer promoted on Dell's website, though a few can be found by searching.
 
Dell is the largest seller of computers with Intel processors. Dell currently sells 10.5 percent of all servers worldwide. The majority of Dell servers use an IA-32 (colloquially "x86") chip, but a growing number use the 64-bit Intel Xeon. Sales of Itanium servers have been very poor; last year Dell sold only 1,371 Itanium servers, up from 12 the previous year. In February, IBM also phased out Itanium-based servers, replacing them with IBM Power CPUs. Fujitsu, HP, Hitachi NEC, SGI and Unisys are the only major manufacturers to still offer Itanium-based servers.

The Intel Itanium was designed in the early 1990s. It was intended to be the processor of choice for 64-bit computers, but the processor suffered from several major flaws preventing widespread adoption. Unlike competing AMD64 chips, the Intel Itanium uses a different instruction set from IA-32 chips. An emulation feature allows them to run IA-32 code, but only very slowly; users were forced to choose between accepting greatly-reduced performance and expending time and programmers' salaries porting their software.  Even Intel has acquiesced to AMD's leadership in this field, designing chips with a compatible EM64T technology.