HP has decided to end its monster Utility Data Centre service, due to lack of demand for the super-expensive data management tools. Coming in at more than $1 million a shot, analysts have described it as too much technology for people to swallow.

Instead, HP will incorporate pieces of UDC into a series of lower-cost, modular utility computing products that will be sold separately in an effort to attract more users, including smaller companies that couldn't afford the complete product. The company announced four modular offerings last month, including one designed to centralise the management of blade servers.

Rumors of UDC's demise began circulating among users last June. This week, Nick Van der Zweep, director of virtualisation and utility computing at HP, confirmed that the "big UDC" is no longer available. UDC components will be sold separately to "get way more sales . . . to smaller customers," Van der Zweep said. "The wrong thing to think is that we are de-investing in utility computing by modularising the parts."

However, one result of the shift is that about 100 HP workers tied to UDC will lose their jobs, with another 100 being shifted to work on the modular offerings, he said.

"HP really did close UDC down, but they are trying very hard to spin it otherwise," said Gordon Haff, an analyst at Illuminata. "They are concerned that it's embarrassing to say UDC is closed and that people will take the news as meaning HP's virtualisation efforts are a failure."

In fact, Haff said he believed UDC was a pioneering effort in utility computing technology when it was introduced in 2001 and that HP continues to have solid offerings. "UDC as an all-singing and all-dancing product was really more than people were looking for, frankly," he summarised

Tom Reinsel, president of the independent OpenView Forum International user group for customers of HP's enterprise management software, said he's pleased by the company's change in strategy on UDC. He said many customers regarded UDC as "a visionary idea" but weren't inclined to "rip out all their hardware and put in UDC". Even testing the technology was expensive, he said.

The original UDC offering included components such as a network operations center, a rack of management tools that monitored available data center resources, capacity planning and optimisation software, and a disk array.

Van der Zweep said HP had "dozens" of UDC customers, who on average spent between $1 million and $2 million for the technology. But Haff said the external user base was probably 10 to 20 customers, with the others consisting of units inside HP. "UDC as a specific product was not successful," he said.