If IBM (NYSE: IBM) is destined not to just be a software and services firm in the future, the latest global server sales report from research firm IDC might have something to do with that, based on the data it contains.

Big Blue server workers must be smiling at the news that “strong demand” for such products as IBM System Z mainframes helped the company report a “strong performance,” IDC reports this week in its closely followed Worldwide Quarterly Server Tracker.

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There’s also plenty of good news for Cisco (Nasdaq: CSCO), which cracked the Top 5 list for the first time.

Not to be left out is Red Hat (NYSE: RHT). Linux server sales are booming, and Red Hat is the global Linux leader. Plus, “cloud” and high-performance computing is driving Linux sales. And guess where Red Hat has bet about the whole red fedora on the future?

You guessed it. The cloud.

No Blue News for IBM

Let’s take a look at the IBM good news first:

“IBM held onto the number 1 spot in the worldwide server systems market with 36.5% market share in factory revenue for 4Q12, as revenue increased 3.1% year over year,” IDC reported. “IBM experienced significant improvements in demand for its System z mainframes aided by a strong product refresh cycle. The fourth quarter also delivered the highest quarterly revenue IBM has achieved in System z in more than a decade.”

Note the conclusion of that last sentence – “more than a decade.”

There’s more.

“After five consecutive quarters of revenue declines, IBM’s System Z mainframe running z/OS increased revenue 55.6% year over year to $1.8 billion, representing 12.3% of all server revenue in 4Q12,” IDC reported.

That total is its ”highest quarterly revenue since 1997, generating nearly $2 billion and driving the overall server market to positive growth in the quarter,” said Jean  Bozman, research vice president in IDC’s Enterprise Platforms Group. “This dramatic growth was due to several factors: technology refresh, new products such as zEnterprise, new accounts in emerging economies, and consolidation of some enterprise Linux workloads onto IBM System z, using the Integrated Facility for Linux (IFL) specialty engines. Although revenue results for System z are traditionally heavier in the fourth quarter, this accelerated acquisition shows the breadth and depth of the IBM mainframe installed base.”

What’s happened to IBM’s hardware business in the last 10 years?

Look no farther than its shrinking presence in RTP.

In the last eight years, IBM sold its failing PC business to Lenovo, which has turned it around to become the No. 2 PC seller in the world (combined with Lenovo’s own China bases, of course, and later global acquistions.)

Then there is the point of sale business that Fujitsu bought in 2012.

Hatters Smile

As for Red Hat, Linux sales jumped nearly 13 percent to capture more than 20 percent of global market share.

“Linux server demand was positively impacted by high performance computing (HPC) and cloud infrastructure deployments, as hardware revenue improved 12.7% year over year in 4Q12 to $3.0 billion,” IDC says.

The Hatters in their new downtown Raleigh headquarters have got to be smiling.

Cisco, meanwhile, is emerging as a threat to the other big server makers and recently launched new servers targeting mobile.

That IDC report is good news for the Triangle, too, since Cisco employs some 5,000 people here.