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Sun Rises in Server Sales

Sun Microsystems (SUNW) boosted its sales of corporate servers by double digits in the second quarter of the year at a time when the other leading server manufacturers experienced a slight decline in revenue.

According to industry research firm IDC, Sun's total server revenue reached $1.58 billion during the April-through-June time frame, up 15.5% from the same period a year ago.

The rising sales helped Sun regain its No. 3 rank in market share, which it had lost to Dell (DELL - Get Report) during the past year.

Dell generated $1.27 billion in server revenue during the second quarter, down 0.5% year over year.

IBM (IBM - Get Report), the No.1 server company, had a 2.2% decline in sales, while Hewlett-Packard (HPQ - Get Report) sales were down 1.7%.

IDC research vice president Jean Bozman credited Sun's growth to its recently introduced line of x86 servers featuring the Advanced Micro Devices (AMD - Get Report) Opteron processor, as well as the company's installed base of RISC-based machines.

The IDC figures mark the second consecutive quarter of strong server growth for Sun, which is in the midst of company-wide reorganization under the helm of new CEO Jonathan Schwartz. In May, Schwartz announced that the company was laying off 5,000 employees.

Industrywide, IDC said server revenue grew a scant 0.6% during the second quarter to $12.3 billion, although unit shipments were up 8.3%.

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