Updated from 1:25 a.m. EDT

IBM

(IBM) - Get Report

and

Dell

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won big and

Sun Microsystems

(SUNW) - Get Report

lost big, as worldwide shipments of server computers rose sharply in the first quarter of 2004, according to two leading information technology research organizations.

Server shipments are an important indicator of the health of the technology industry beyond the consumer market because servers are used to run business networks and applications.

Although researchers Gartner and International Data Corp. tabulate sales results somewhat differently, reports this week from the companies had generally similar findings. There was however, a disagreement about how quickly Dell and IBM grew during the quarter.

Gartner found that the overall market for servers surpassed $11.8 billion in the first quarter, a year-over-year increase of 9.3%; IDC said the market grew 7.3% to $11.5 billion.

IBM and

Hewlett-Packard

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continued to lead the market while Sun and Dell were virtually tied for third place.

IBM remained on top, posting server revenue of $3.413 billion, an increase of 20.5%, said IDC; Gartner pegged sales at $3.63 billion, an increase of 16.7%. Sun, on the other hand, saw server sales revenue drop by 12.5%, according to both reports.

Both companies gave Dell revenue of more than $1.1 billion, but Gartner figured that represented growth of 24.8%, while IDC saw it as growth of just 13.5%.

HP's server revenue grew by 3.8%, according to IDC; and by 6.2%, according to Gartner. IBM's revenue grew by 20.5%, IDC found, and by 16.7%, said Gartner. HP led the market according to total units shipped, IDC said.

The market for computers powered by so-called x86 microprocessors, the basic design used by both

Intel

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and

Advanced Micro Devices

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grew strongly. According to IDC, x86 server revenue grew by 14.1%, to $5.1 billion. Unit shipments grew by 23.5%, to more 1.3 million servers.

Overall, the studies found a continued trend toward strong growth in relatively low-cost

under $5,000 servers running

Microsoft's

(MSFT) - Get Report

Windows or -- in an increasing number of cases -- the Linux operating system.

In slow pre-holiday trading Friday, IBM shares were recently up 10 cents, or 0.1%, to $88.69; Dell was down 4 cents, or 0.1%, to $35.16; Sun was unchanged at $4.18 and HP unchanged at $21.14.

As originally published, this story contained an error. Please see Corrections and Clarifications

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