The market for servers in Europe, the Middle East and Africa grew 12.5% to $3.4 billion in the second quarter of this year, its fastest year-on-year growth since 2004, IDC has found.

The number of servers sold in the region, however, was growing at a slower pace – up 2.7% to 543,000. This of course means that the average sale price of a server is increasing.

The figures must understood against a backdrop of server virtualisation. Yesterday, at VMware’s user conference in the US, CEO Paul Maritz claimed that there are now as many virtual servers as physical servers.

This explains the slow growth in server shipments – business require fewer physical servers to support their IT workload following server virtualisation – but the increase in revenue suggests that many organisations are nevertheless investing in new equipment to support the virtual environments, as opposed to simply reusing their old kit.

IDC predicts that continued virtualisation, as well as cloud computing and macroeconomic trends, will lead to weaker demand in the second half of the financial year.

The market was once again dominated by HP, with a 38.5% market share, followed by IBM then Dell. Oracle’s market share fell by 1.7%, IDC said, as sales of former Sun Microsystems products failed to keep pace with the market.