International Data Corporation (IDC) has released its quarterly server tracker results, finding that the worldwide server market increased 4.8 percent year on year in the third quarter.

The increase brought the market to $12.7 billion, the second consecutive quarter the server market has expanded on a year-over-year basis.

Server unit shipments were up 5.7 percent to 2.38 million units due to investments in datacenter capacity expansion. IDC also said that it continues to see signs of a server refresh cycle, which will lift the market into 2015.

“The server market is in a state of transition. To compete, vendors must be able to innovate on server designs and go-to-market strategies,” Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC, said in a statement. “We also saw the continuation of a cyclical enterprise refresh cycle, which IDC expects will continue well into 2015. This refresh will be further accelerated by Microsoft’s announcement that it is ending support for Windows Server 2003, coupled with Intel Corp.’s recent release of its Grantley Xeon EP.”

Of stats from the report: volume systems were up 8.8 percent for the quarter. Midrange systems grew 18.4 percent year, while high-end enterprise systems headed in the opposite direction, dropping -23.2 percent, although IDC does state this is primarily due to “difficult year-over-year comparisons and product cyclicality issues.”

In market share, Hewlett-Packard Co. held the top position in the worldwide server market with 26.5 percent vendor revenue share for the quarter. IBM held the number two spot with 18.2 percent share as vendor revenue decreased -17.8 percent year-on-year. Dell Inc. took third position with 17.8 percent, with Cisco Systems and Oracle holding positions four and five with 6.2 percent and 4.1 percent vendor revenue share, respectively.

Server Market Findings

The United States, Asia/Pacific, and Western Europe experienced sharp growth with increases of 8.8 percent, 8.5 percent, and 8.3 percent year-on-year, respectively.

China saw significant growth with revenue up 20.9 percent to $1.7 billion, led by Chinese OEMs Inspur Group Co., Ltd., Huawei Technologies Co. Ltd., Lenovo Group Ltd. and Sugon Information Industry Co., Ltd.

Demand for x86 servers improved with revenues up 11.6 percent to $10.7 billion worldwide, with shipments increasing 6.0 percent to 2.36 million servers.

Blade servers grew 1.9 percent year over year to $2.3 billion, accounting for 18.0 percent of total server revenue.

Density Optimized servers saw a revenue decline of -4.4 percent year over year to $836 million, with unit shipments decreased -5.6% to 253,443 servers.