If you thought that the microchip wars raged exclusively between Intel (NASDAQ:INTC) and Advanced Micro Devices (NYSE:AMD), you haven't been paying attention to big-iron servers.

There's a $43.7 billion annual market for server systems -- the kind of computers that fill out corporate data centers and handle mission-critical jobs like enormous databases or scientific number-crunching. While both AMD and Intel sell high-end chips into this market (and greatly appreciate the fat margins they can collect on those products), there are other competitors as well. That's simply not the case in the consumer sector, where the Intel/AMD duopoly reigns supreme.

And like the consumer-oriented chip sector, server products are constantly in flux. This week alone saw chip updates from Intel and IBM (NYSE:IBM). Intel's refreshed Itanium chips are optimized for speed and data bandwidth, more than doubling the performance of the previous top-end Itanium chip. Having already established a comfortable performance lead, IBM could have rested on its laurels. Instead, it more than quadrupled the performance of the Power6 architecture, while also cutting down power draws. Ouch.

Besides the Itanium and Power series, high-end servers are also designed around Intel Xeon and AMD Opteron chips and the SPARC family, designed by Oracle (NASDAQ:ORCL) subsidiary Sun Microsystems and manufactured by Texas Instruments (NYSE:TXN). Every major system builder, including IBM, sells Xeon and Opteron servers. Hewlett-Packard (NYSE:HPQ) still heavily promotes Itanium servers, but market leader IBM stopped building those years ago. Power processors are IBM-only, while SPARC is found inside Sun systems. It's a complex market, but it's certainly big enough to make an effort to understand it all.

If you see one company or the other making some fantastic claim to market dominance, you should reach for the salt shaker immediately. Yes, IBM is the leader -- but with a modest 32% market share, which includes selling plenty of Intel and AMD machines. And while the Itanium is an impressive piece of hardware, lower-end Xeons are perfectly fine for most tasks. Among the 500 most powerful supercomputers in the world, you'll find 6 Itanium servers, 42 Opterons, 52 Power processors, and a staggering 396 Xeons.

This week's server-class chip updates will not make a material difference for Intel or its system builders, thanks to the tiny niche the Itanium has built for itself. The Power7, on the other hand, will play a significant part in IBM's business going forward, phasing out older Power6 processors and giving Big Blue an eco-friendly selling point. Look for IBM to steal some server market share in coming quarters.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. Intel is a Motley Fool Inside Value choice. Motley Fool Options has recommended a buy calls position on Intel. The Fool owns shares of Oracle. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like. The Motley Fool is investors writing for investors.