HP this week revealed that it will discontinue its well-regarded MediaSmart Server line, which runs Windows Home Server (WHS). The news comes on the heels of a Microsoft announcement about the removal of a key data-storage feature from the next WHS version. But the software giant claims the announcements are unrelated.

That is, of course, completely untrue.

But then Microsoft isn't the only one trying to sugarcoat the truth to protect the understandably shattered egos of WHS fans. HP's MediaSmart Server marketing manager, Allen Buckner, told enthusiast site MediaSmartServer.net that HP was "shifting additional resources to focus on webOS initiatives." In case it's not clear what he means, webOS is the Palm-based smartphone OS that HP acquired earlier this year. It has absolutely nothing to do with server products.

To recap, Microsoft announced last week that the next version of WHS wouldn't include the Drive Extender technologies that provide that product with two crucial features: automatic data redundancy across two physical disks and a single, drive-letter-less storage pool that can be extended almost infinitely simply by attaching another disk to the system. WHS fans reacted with predictable outrage at the announcement, and thousands of them have signed an online petition demanding that Microsoft put it back.

As I exclusively revealed, however, Microsoft spent several months trying to fix problems with Drive Extender before giving up over server application compatibility and data-integrity issues. It's unlikely that the software giant will give in to such a small group of users, however vocal they might be.

More important, perhaps, is how HP's exit from the WHS market will affect a product that was already reeling from bad news. In its current state, the next WHS version—code-named Vail—is already seriously hobbled, but one might have expected a server giant like HP to include its own Drive Extender-like functionality in next-generation MediaSmart Server products. That is now clearly not going to happen.

And HP was, by far, the biggest fish in what is a very small pond. While other respected hardware makers like Lacie and Acer do in fact market and sell WHS-based servers, none of them have the reach of HP, and none have released WHS products as universally well received as HP's. HP's exit from the market is as big a blow to WHS as was the removal of Drive Extender.

Is this the end of WHS? Maybe, but let's wait and see what the promised January beta looks like. It's still possible that Microsoft could salvage this excellent and useful product and turn the next version into something special. Today, that's just a little bit harder to believe, unfortunately.