The worldwide server market is continuing to gain ground, with a two per cent revenue growth during the third quarter of 2003.

Growth in Linux-based servers was identified as one of the brightest spots in the market, according to analyst IDC's Worldwide Quarterly Server Tracker.

Linux server platforms posted an impressive 49.8 per cent growth in factory revenues year over year, while unit shipments grew 51.4 per cent year over year.

"Linux servers generated $743m (£437m) in the quarter, demonstrating their traction in the worldwide server marketplace as they take on more and different types of workloads from other types of servers," said Jean Bozman, research vice president in IDC's worldwide server group.

"Linux servers have demonstrated six consecutive quarters of year-on-year revenue growth, proving that they are not a flash-in-the-pan technology."

Server factory revenue topped out at $10.8bn, with the quarter the second consecutive one to see positive growth, following nine quarters of decline.

Overall, shipments grew by almost 20 per cent, reflecting the underlying demand for volume servers, which IDC defines as small servers priced less than $25,000. Revenue grew by 9.5 per cent year over year.

Sales of more expensive server systems in the mid-range enterprise ($25,000 to $499,999) grew revenues by a more modest seven per cent year over year, and high-end enterprise servers (priced $500,000 or more) declined in revenue by 14 per cent.

This is due in part to IT budget constraints and to shifts in server deployments that favour volume servers, suggested the analyst firm.

"Volume servers are generating most of the positive momentum in the worldwide server market," said Vernon Turner, group vice president of IDC's worldwide server group.

"However, two quarters of positive growth do not necessarily mean that a long-lasting economic rebound is in place."

According to the study, IBM held onto its number one spot in the worldwide server systems market, with 31 per cent market share, followed by HP, Sun and Dell.