To London’s Charlotte Street Hotel this morning, and the official UK launch event for Intel’s new Xeon 5500 series CPUs – the ones with that ever-so-fast Nehalem architecture in them. (No, it wasn’t a joke. Real things do happen on April 1st.)

It wasn’t the most surprising launch of a server processor ever, but server events aren’t usually renowned for thrills and spills.

Some interesting figures emerged though. They show in just two slides the market reality behind Sun being swallowed up by IBM a few weeks ago, and the sheer dominance of Intel when it comes to processors in everything from enterprise servers to netbooks.

With apologies for the shoddy photography, take a gander at the image below, and click on it for an enlargement if you’re struggling with the fuzziness:

Intel’s Tom Kilroy used this slide to show how the server market in general is growing, which it plainly is, from something like 250,000 units shipped worldwide in 1990, to around 8 million today. But it’s more interesting if you note the key: the blue part of the graph is Intel’s share; the red is competitors’.

The interesting part is that if you squint at the bottom-left of the graph you’ll see it’s all red up until 1992. In other words, back in the late 1980s and early 1990s Intel wasn’t selling any processors at all into servers. Bring it up to 2008 and you’ve got 7 out of 8 million – about 87% – with Intel inside (**BONG!!** bong bong bong!).

That’s a mighty fall for the old purveyors of RISC (as opposed to Intel’s CISC) architecture and what used to be a high-value, high-margin business. It’s always been one of Sun’s main markets.

If you look at another slide – even bearing in mind this is Intel’s own marketing material so was never going to come out in favour of the opposition – the future of non-x86 CPUs is looking decidedly ropey:

A tenth the cost and almost three times the performance of IBM’s Power6? Even taking the required pinch of salt into account, it’s hard to argue with numbers like that.

Intel’s commoditisation of the server market has followed unstoppably from its domination of desktop PCs. The economies of scale in using the same processor architecture and technology in servers, desktops and laptops seems to be pushing x86 unit cost down to a level that nobody else can begin to match. Add to that the compounding effect of the ever-increasing R&D budget that comes of selling so many processors – Power6, for instance, is still on 65nm fabrication when Intel is steaming ahead at 45nm – and you’ve got a terrifying level of domination.

In fact the only place in the market where Intel – or at least x86 architecture – is not dominating is at the very bottom end. With mobile-phone processors and ultra low-power embedded systems, the likes of ARM and Motorola are still hanging on.

In a conference call a late last year, Intel’s Pat Gelsinger stated it would be “decades” before Intel could displace ARM in very low-power devices.

Time will tell whether that was actually a very conservative estimate. I certainly wouldn’t bet on it.