Intel (NASDAQ: INTC) has killed the Intel Hybrid Cloud server and AppUp Small Business Service, according to a letter sent by the chip giant to resellers, The VAR Guy has confirmed. Poor customer demand apparently drove Intel's decision to kill the hardware line and related cloud and managed services software bundles. For resellers, this could be the latest sign that pure cloud services are crushing the small business server market.

A letter from Intel to resellers stated, in part:

"We thank you for your support of the Intel AppUp ® Small Business Service and your participation in the Intel Hybrid Cloud program to date. We regret to inform you, however, that after reviewing our business results, Intel has made the decision to discontinue the service, effective immediately. The decision to discontinue the service was not made lightly, and has been based primarily on slower than expected growth and market adoption.

Given this decision to discontinue the Intel AppUp ® Small Business Service, we respectfully request your support to conduct the service shutdown."

What's Next for Resellers?

Yes, sales of pure cloud-based services are rising fast. But a hefty portion of the IT channel -- and small business customers -- still want on-premises servers. Alas, resellers seem to be running out of options given Microsoft's decision to kill Windows Small Business Server in 2012 and now Intel Hybrid Cloud's death in 2013.

Why did Intel Hybrid Cloud fail? The VAR Guy has a few theories.

  • Cloud: Sure, pure cloud solutions are gaining momentum but that's not all.
  • Fragmented Software Market: Intel Hybrid Cloud had MSP-related software deals with vendors that focus on remote monitoring and management, storage and accounting packages. But ultimately, MSPs run a range of different RMM and PSA (professional services automation) packages solutions -- some of which were not available as part of the Hybrid Cloud package.
  • Inconsistent Marketing: Intel made a big splash when it first launched Hybrid Cloud. Within some circles -- like the SMB Nation crowd -- Hybrid Cloud was easily undersstood. But Intel never really took that marketing message to the channel masses.
  • Microsoft's Exit: While Intel Hybrid Cloud ran on either Windows Small Business Server or Linux, Microsoft's decision to kill SBS Server in 2012 certainly limited Intel's Hybrid Cloud options going forward.

Side note: The VAR Guy has requested a comment from Intel but has not heard back from the technology giant. That's all from The VAR Guy for now.