Worldwide server shipments in 2007 increased 7.4% from 2006, while worldwide server revenue grew 3.8% in 2007, according to Gartner.
"The server market did exhibit growth for the fourth quarter and for the year as a whole," says Jeffrey Hewitt, research vice-president at Gartner.

 "In fact, the fourth quarter climbed almost 11% in shipments and just under 3% in revenues in spite of the fact that there have been concerns about a slowdown due to downturns in certain economic sectors of particular geographies.
"RISC-Itanium Unix servers fell on a global basis for 2007 at 13.8% in shipments but grew 1.7% in revenue for the year," says Hewitt. "Comparatively, mainframes showed an 11.8% revenue decline which can be attributed to a slow period in the replacement cycle timing for this server class."
IBM continued to lead the worldwide server market based on revenue. The company ended the year with an overall slight increase in revenue (0.8% for 2007). Gartner analysts attribute the company's performance to a 10.2% growth in System x and a 9.1 per cent growth in System p while System z and System i revenue both dropped 9.6% for the year.
Of the top five global vendors, Dell, HP, IBM and Sun all had revenue increases for the year, while Fujitsu/Fujitsu Siemens was the only one to have a slight decline.
In server shipments, Hewlett-Packard remained the worldwide leader for 2007. Its shipment growth was a solid 16.6%. The ProLiant brand grew 17.2% in shipments for the year while HP Integrity climbed 56.8% and HP NonStop went up 13.8%. All other HP brands declined for the period, which when combined with the gains of the other brands, produced the overall final result.
Of the top ten vendors in server shipments worldwide, only three did not have shipment increases for the year: IBM, NEC and Sun.
Blade servers continue to be a high-growth segment with a revenue increase of 44.5% and a shipment increase of 19.9% for the year. HP was the 2007 leader with blades at a 41.7% shipment share, with IBM being in second place at 30.9%. These two vendors continued to dominate this form factor and totalled almost 78 per cent of the worldwide blade revenue share for 2007.
In Europe, the Middle East and Africa (EMEA), server shipments totalled 2.7-million units in 2007, a 9.2% increase from 2006. Server revenue totalled $18.1-billion in 2007, a 6.6% increase from 2006.
"The fourth quarter of 2007 exhibited a positive level of growth up 6.4% in shipment terms and 3.3% in revenues compared to the same quarter in 2006. As a result, the full year drew to a positive close," says Errol Rasit, senior analyst at Gartner.
"In the x86 market, ongoing demand for additional capacity, strong small and medium-sized business growth are currently offsetting any negative effects such as virtualisation, leading to a growth of 13.9% in revenue and 11.3% in unit shipments in 2007.
"Although RISC-Itanium Unix servers exhibited growth in the fourth quarter and achieved a 3% increase in revenue terms for 2007, volumes for the year declined 20.6% signifying increased high-end sales. Mainframes had the weakest revenue performance of any segment for the year, declining 7% from 2006."
Based on revenue, HP retained its top position in 2007. HP's strength was largely driven by its x86 business as well as modest growth with business-critical systems sales in EMEA. IBM's position was weak in 2007 due to a slow down in their mainframe business, caused by the highly cyclical nature of the business.
Based on server shipments, HP maintained its top position with shipments growing 16.4% compared to 2006. Dell pushed ahead of IBM to claim second position with just over 50 000 units separating the two vendors.
"HP's solid unit growth through 2007 meant that it exhibited the strongest year-on-year growth of all the vendors; however Fujitsu Siemens Computers was a close second, with only 0.4 percentage points' difference," Rasit adds.