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Server Market Grows For Second Consecutive Quarter: Page 3 of 4

"Linux servers have demonstrated six consecutive quarters of year-on-year revenue growth, proving that they are not a flash-in-the-pan technology and that they are meeting real-world computing requirements," Bozman said.

Microsoft Corp.'s Windows also continued its growth in the market, with revenues increasing 10.3 percent and unit shipments gaining 21.4 percent. Overall, Windows accounted for 31.7 percent of market revenue in the quarter, or $3.4 billion.

The growth in Windows servers was due to upgrades in the large Windows NT server installed base to Windows 2000 or Windows 2003, the research firm said. Increases in the average sales prices for Windows 2003 servers with four or more processors also contributed to the revenue growth.

Revenues from Unix servers, on the other hand, declined by 3.8 percent to $4.1 billion. But the news wasn't all bad. It was the lowest rate of decline in seven consecutive quarters. Lower prices helped drive Unix server shipments up by 4.3 percent.

HP toppled Sun from the No. 1 spot in the Unix server market, grabbing 33.8 percent of overall factory revenue. Sun's Unix revenue declined 10.1 percent, but its unit shipments grew by 17.4 percent, reflecting the company's focus on low-cost computing.