Worldwide server revenue tumbled 15.5 percent in the third quarter to $10.7 billion, industry tracker Gartner said on Monday, with four of the top five vendors posting double-digit declines from a year ago.

Still, Gartner noted that signs of stabilization are appearing in the market, as improvement was seen from the previous quarter.

Sales of servers and other technology hardware have been severely impacted by the economic slowdown, as business customers have drastically dialed back on spending.

Third quarter server unit shipments fell 17.1 percent to 1.9 million.

But Gartner analyst Jeffrey Hewitt noted the July-September period saw solid unit and revenue increases from the second quarter.

That suggests that the market as a whole is showing signs of stabilization as we move toward the end of 2009, he said in a release.

IBM maintained the top spot in Gartner server rankings, gaining more than a point of market share to 31.7 percent. IBM saw server revenue fall 12.3 percent.

Server revenue at Hewlett-Packard Co, the No. 2 vendor, fell 15.1 percent, but its market share edged up slightly to 30.2 percent.

The biggest market share gain among the top 5 came from No. 3 Dell Inc, where revenue fell a mere 5.1 percent. The company's market share rose to 13.4 percent.

Server sales at No. 4 Sun Microsystems Inc continued to sink, falling 32 percent in the third quarter. Sun's $7 billion acquisition by Oracle Corp is still being examined by European Union regulators.

All of the top tier vendors saw sequential revenue growth in the third quarter except for Sun.

(Reporting by Gabriel Madway; editing by Gunna Dickson)

Electronics Dell Ibm