HP Pulls Out of the Windows Home Server Market, Leaves Vail Out in the Cold
HP today announced an immediate withdrawal from the Windows Home Server market. — In a briefing earlier this month, the company explained that the recent acquisition of Palm had led to a shift in business priorities across …
Context & Ripple Effects
This is the second time in under two years that HP has abruptly pruned a Windows-based consumer product line: it already pulled Linux from all new UK netbooks in February 2009, and now the company is exiting Windows Home Server outright, stranding Vail, the codename for its next-generation home server product. The stated driver is the $1.2 billion Palm acquisition completed in October 2010, which HP says has shifted business priorities across the company.
The timing matters because HP's attention is visibly elsewhere: its $799 Slate 500 tablet launched in late October is backordered with a six-week shipping delay, and reviewers have just published hands-on looks at webOS 2.0, the first major software release since HP bought Palm. The home server business, by contrast, had no comparable strategic champion inside the company.
First-order effects
- HP's MediaSmart server customers and prospective buyers lose their vendor overnight, with no committed upgrade path for Vail, while Microsoft's next version of Windows Home Server loses its highest-profile OEM hardware partner on the eve of launch.
- HP redirects engineering and marketing resources toward the Palm/webOS slate and smartphone portfolio, where demand signals like the Slate 500 backorder give management a clearer near-term story.
Second-order effects
- Remaining OEMs must decide whether to fund Vail hardware development without HP anchoring the category, raising the odds that Microsoft's home server roadmap thins to enthusiast-driven vendors rather than mainstream boxes.
- The exit removes HP's counterweight in the living-room storage niche just as cloud storage services court the same buyers, pushing consumers who would have bought a home server toward hosted alternatives instead.
Third-order effects
- If the pattern holds — HP abandoning Windows-centric niche hardware whenever a Palm-era priority conflicts — the company's portfolio consolidates around webOS devices and enterprise lines, and partners learn to treat HP's consumer commitments as conditional.
- A flagship OEM walking away from a Microsoft client product ahead of its release signals that in post-PC strategizing, even established Windows categories are negotiable — a dynamic other OEMs weighing their own platform bets cannot ignore.
The trend: Consumer home-server hardware is being abandoned by big OEMs in favor of mobile platforms and cloud services, leaving Microsoft's niche Windows products dependent on smaller enthusiasts-first vendors.