Factory revenue in the worldwide server market increased 11.0% to $10.9bn in the second quarter of 2010, compared to $9.8bn in the same period last year, according to market research firm IDC.

Server unit shipments increased 23.8% year over year in the second quarter of 2010, improving slightly over the strong 23.0% year-over-year shipment growth reported in 1Q10 and representing the fastest year-over-year quarterly server shipment growth in more than five years, IDC said.

Volume systems and midrange server revenue increased 31.7% and 15.6%, respectively, while high-end enterprise segment revenue declined 27.2%, compared to the same period a year ago.

According to IDC, HP held the top spot in the worldwide server market with 32.5% market share in the factory revenue in the second quarter of 2010, led by strong demand for its x86 ProLiant servers during the quarter. Its revenue increased by 26.0% year over year.

IBM held the second place with 29.8% share as factory revenue declined 3.2% year-over-year. Dell maintained the third spot with 15.3% market share with revenue increasing 36.5% year-over-year. Oracle maintained the number 4 position with 8.6% market share and Fujitsu gained fifth position holding 3.4% revenue share in 2Q10.

IDC said that Microsoft Windows server demand was positively impacted by the accelerating x86 server market, as hardware revenue increased 6.7% and unit shipments increased 28.2% year over year. Linux server revenue rose by 30.1% to $1.8bn in the quarter and Unix servers experienced 7.3% revenue decline, compared to second quarter of 2009.

The x86 server factory revenue increased 35.3% to $7.0bn as unit shipments increased 25.8% to 1.8 million servers. The blade market accelerated and continued its sharp growth in the quarter with factory revenue increasing 40.3% year over year, with shipments increasing by 13.6% compared to 2Q09.