IBM has something to be thankful for this holiday season: It's again alone on top of the worldwide server market. IDC reported on Wednesday that IBM had 29.8% of the server market during the third quarter, putting it ahead of Hewlett-Packard, which was tied for the top spot with IBM in the second quarter. But HP has something to be thankful for, too: It claimed the lead in the Unix server market with a 32.9% market share, while Sun Microsystems, the segment's perennial leader, slipped to second place with 30.4%.

Overall, worldwide server sales were $10.6 billion in the quarter, down 5.6% from the same quarter a year earlier. But IDC research VP Jean Bozman points out that this market contraction is the smallest year-over-year decline that the server market has seen in two years. "The big picture for the quarter is that the decline seems to have slowed worldwide," she says. "We know IT budgets have been under control for the past year, but we might see some increase in spending in 2003."

Worldwide server sales this year are still expected to be well below the market's $60 billion peak in 2000 as four of the top five vendors have seen revenue shrink from the third quarter of 2001. Only Dell, which was fourth in market share with 8.9%, posted revenue growth--sales were up 7.5% from the third quarter of 2001. For the quarter, IBM's server revenue was $3.2 billion, followed by HP with $2.9 billion, Sun with $1.3 billion, Dell with $920 million, and Fujitsu with $413 million.

Linux and Windows servers were the bright spots for the server market during the quarter, with the markets showing year-over-year growth of 26.7% and 3.2%, respectively. Unix server sales were down 10% for the quarter. HP was the top vendor in the standard Intel architecture server market with a 32.8% share, followed by Dell with 21.9%.