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IBM topped the server market in revenue during the fourth quarter of 2010, riding an increase in sales in mainframe systems, a market research firm reported.

IBM accounted for 37.4% of the worldwide server market, which reached $15 billion in the quarter, an increase of 15.3% from the same period a year ago, IDC said in releasing market numbers late Monday. IBM's share of factory revenue in the quarter rose 21.9% year over year.

IBM got its biggest boost from sales of System z mainframe systems, coupled with a continuation of steady sales of its x86-based System x servers. System z is in the high-end of the server market, which grew by 29.1% year over year in the quarter. The increase was the highest ever recorded by IDC, which attributed the growth to a refresh of the System z server earlier in 2010.

System z servers running z/OS saw the second consecutive quarter of rising revenue in the fourth quarter, with 69.1% year-over-year growth to $1.7 billion. Systems running z/OS accounted for 11.3% of all server revenue in the quarter and System z was the only platform outside of Linux and Windows to see positive revenue growth in the quarter.

IBM's refresh of the mainframe, along with increased spending by businesses on IT in general, drove server revenue for the company in the quarter, IDC analyst Jean Bozman said. In addition, IBM's x86 server sales were helped by its release toward the end of 2010 of the zEnterprise BladeCenter Extension (zBX), which makes it possible to run applications on IBM's x86 System x blade servers and integrate them with a database application running on the mainframe.

Bozman said the architecture provides higher performance and throughput when running, for example, analytics and business intelligence applications on an IBM blade server. The architecture works best for applications that need to interact with the database in the mainframe. In addition, everything related to the application can be managed together.

"They [IBM] have talked and hinted about this capability for years," Bozman said in an interview. "And this is the first time that I know of that they actually delivered it into customers' hands."

Coming in second to IBM was Hewlett-Packard, which accounted for 29.9% of the total server market. HP's factory revenue rose 13.2% year over year, helped by increasing sales for its x86-based ProLiant servers. Dell held on to third place with a 12.6% share, driven by revenue growth of 26.8%. Dell saw higher sales among its small and medium-sized business, enterprise and public sector customers, IDC said.

Sun Microsystems, now owned by Oracle, saw a year-over-year revenue decline of 14.4% in the quarter to a 5.9% market share, while fifth-place Fujitsu held a 3.6% share following a revenue drop of 9.4%.

Revenue from systems running x86 platforms from Intel and Advanced Micro Devices grew sharply in the quarter, rising 21.4% to $9 billion worldwide, the highest quarterly revenue ever reported by IDC for x86 servers. The architecture accounted for 59.7% of server sales worldwide.

IDC attributed the increase to the introduction of higher performing processors with multiple cores, which has made it possible for organizations to run more applications on the relatively inexpensive commodity systems.

The popularity of x86 systems did not dampen interest in Unix servers. Revenue from Unix is less than it was two years ago, but the systems are still relevant, as revenue in the quarter was relatively flat at $3.8 billion, representing 25.6% of the overall market and breaking a string of quarterly declines. Bozman said the Unix market is stabilizing, as businesses refresh the systems they have.

"So many billion of dollars have been invested in Unix worldwide and at some point people have to buy additional capacity for systems that are already there," she said.