HP sinks utility project, lays off some workers

Firm to sell Utility Data Center package as separate software modules. UDC staff handed walking papers.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
Hewlett-Packard is getting rid of one of its high-profile utility-computing projects, though much of the technology will live on in other initiatives.

The Palo Alto, Calif.-based company has decided to discontinue its Utility Data Center package, designed to let administrators pool servers and storage systems so that tasks can be shifted as demands shift. Although UDC was one of the more notable early examples of the concept of utility computing, the entire system cost millions of dollars to implement. As a result, few customers ever installed it, HP representative Don Gentile said.

HP has decided to offer many of the tools in UDC for managing servers or distributing computing power as software modules. Some of the UDC tools, for instance, are now part of HP's BladeSystem for controlling blade servers.

"The vision doesn't change, but the approach does," Gentile said.

With the shift, HP is cutting some jobs. The total number will come to less than 200, Gentile said. In its most recent quarterly conference call, HP said it would continue to adjust its operations. The company stunned investors in August, when it announced lower-than-expected revenue and earnings.

The shortfall was caused by "unacceptable execution" in the enterprise computing segment, HP CEO Carly Fiorina said at the time. In response, HP entered another corporate reorganization. Other adjustments could follow, Gentile said.