For the full year 2011, worldwide server revenue increased 5.8% to $52.3bn when compared to 2010, while worldwide unit shipments increased 4.2% to 8.3 million units, according to the International Data Corporation’s (IDC) Worldwide Quarterly Server Tracker.

Factory revenue in the worldwide server market, however, decreased 7.2% year over year to $14.2bn in the fourth quarter of 2011.

This was the first quarterly decline in factory revenue in two years, according to the research firm.

Meanwhile, worldwide server shipments increased 2% to 2.2 million units in 4Q11 when compared with the year-ago period.

IDC Enterprise Platforms group vice president and general manager Matt Eastwood said despite experiencing the first quarterly decline in factory revenue in two years, the server market was in many ways in alignment with IDC’s fourth quarter expectations, which included generally strong year-over-year compares and product lifecycle challenges across several key market segments.

"Although the server market is nearly back to pre-recession spending levels, the market continues to evolve in terms of the technologies and supplier choices being made across core market segments and geographies. IDC believes that server demand will begin to improve in the second half of 2012 following a number of critical product refreshes occurring in the first half of the year," said Eastwood.

IBM took the number 1 slot in the worldwide server systems market with 36.5% market share in factory revenue for 4Q11, as revenue declined 7.6% year over year.

It was followed by HP with 26.4% share for the quarter as revenue decreased 16.2% compared to the corresponding period in 2010.

Dell was the only top 5 server vendor to grow in 4Q11, experiencing 9.7% year-over-year revenue growth, owing to demand from SMB and enterprise customers.

Among other findings of IDC was the fact that Linux servers now represent 18.4% of all server revenue, up 1.7 points when compared with the fourth quarter of 2010.

On the other hand, Microsoft Windows server demand subsided slightly in 4Q11 as hardware revenue decreased 1.5% year over year.