Worldwide server shipments for the first quarter of 2008 increased 7.6 percent over the same quarter last year, while worldwide server revenue for the same period climbed 4.3 percent according to Gartner Inc.

Worldwide server revenues totaled $13.6 billion for the quarter, as worldwide servers shipments reached just under 2.3 million units.

"There were a number of dynamics that affected the market to produce an initial quarter of growth for 2008," said Jeffrey Hewitt, research vice president at Gartner. "For example, x86 server replacements were on an upswing as the year commenced, we continued to see build outs of large Web datacenters, and emerging-market growth forged ahead."

RISC-Itanium Unix servers fell in shipments but showed a small amount of growth in revenue, Hewitt said. "In this segment, shipments fell 8.4 percent while revenue grew 3.7 percent for the quarter."

And according to IDC's latest Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market grew 3.5 percent year over year to $13 billion in the first quarter of 2008 (1Q08). Despite slowing economic growth in the U.S., this is the eighth consecutive quarter of positive revenue growth and the highest first quarter revenue in the worldwide server market since 2001. More than 2 million servers were shipped for the second consecutive quarter and unit shipment growth of 7.8 percent year over year in 1Q08 demonstrates that worldwide demand for servers has remained healthy in the quarter, even as virtualization technology is being adopted worldwide.

Volume systems revenue growth improved to 5.4 percent year over year in the first quarter, the slowest growth rate for this increasingly important segment since 4Q06. However, the segment was outperformed by year-over-year growth of 9.7 percent in the high-end enterprise segment. The midrange enterprise segment of the market declined 7.2 percent year over year, the fourth consecutive quarter of declining revenue for the segment.

"The server market continues to experience solid growth as businesses of all types focus on expanding and refreshing their IT infrastructures for both traditional and emerging cloud-based workload," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Geographically, the Americas was the weakest region with an overall revenue decline driven in part by a slowing U.S. economy. However, it is also clear that positive exchange rates are helping drive positive server revenue growth in EMEA and Asia/Pacific. Technology suppliers will need to be careful not to become too dependent on this short-term economic boost."

Gartner said HP and IBM continue to vie for market leadership in the worldwide server market based on revenue. Similarly, IDC reported HP and IBM again finished the first quarter in a statistical tie for the No. 1 position in the worldwide server market with 29 percent and 28.1 percent share respectively.

Gartner's numbers showed HP took the overall revenue share lead over IBM by a narrow 0.7 percent for the quarter. HP had increases in both its ProLiant and HP Integrity brands which offset some revenue declines in its other brands. This produced a year-to-year revenue increase of 10.3 percent for the period and pushed HP's share up 1.6 percent. HP's revenue share in the blade server market increased by over 13 percent compared to the same quarter last year.

Dell, Fujitsu/Fujitsu Siemens, and IBM all had revenue growth for the period at 6.6 percent, 4.9 percent and 2.1 percent respectively. Sun was the only global vendor not to have server revenue growth -- it had a slight decline at just under 1 percent.

In server shipments, Hewlett-Packard grew just over 7.8 percent compared to the first quarter of 2007, and retained its worldwide server shipment lead. The share gap between it and second-place Dell decreased 1.5 percentage points for the quarter. HP finished the quarter with just over a 30 percent shipment share for the period. HP's ProLiant and HP Integrity product lines produced shipment increases with a slight increase in shipments for HP NonStop as well. Its remaining brand, AlphaServer, had a shipment decline. HP pushed its blade server shipment share just over 8 percent for the quarter.

Dell posted a 15.8 percent growth for the quarter. IBM increased 2.3 percent and Sun grew 6.6 percent. Fujitsu/Fujitsu Siemens was the only global vendor to decline -- it shrunk 2.6 percent, the Gartner report noted.

IDC said Unix servers experienced a modest -- 0.8 percent revenue decline when compared with 1Q07. With particular strength in the volume and high-end enterprise segment of the Unix market, worldwide Unix revenues were $4 billion for the quarter, representing 30.6 percent of quarterly server spending.

Linux servers posted their second consecutive quarter of solid growth, with year-over-year revenue growth of 8.4 percent for a total of $1.8 billion in the quarter, second only to the $2 billion in Linux server revenue seen in 4Q07. Linux-based servers now represent 13.7 percent of all server revenue.