During that time, the writing for Itanium seemed to be on the wall. With shipments relatively low, vendors including Red Hat, Microsoft and Oracle stopped developing new software for the chip. Oracle has been forced to resume its development for Itanium, after HP filed a breach of contract lawsuit, but not before some customers backed off.
"When Oracle said no more software for Itanium, that spooked a lot of customers," Reynolds said.
It's unclear what prompted Intel and HP to revise their Itanium plans suddenly, but one possibility is that customers got skittish about Oracle's retreat and told HP they planned to leave the platform, prompting Intel and HP to reconsider their plans.
"Clearly, database software is a crucial element in this kind of high-end system, and it's far easier for an end user to change the underlying hardware platform than it is for them to change the underlying database platform," Brookwood said.
HP's revenue from Business Critical Systems, which includes its Itanium servers, dropped 23 percent in 2012 compared to the previous year. In December, IDC forecast that Itanium server shipments would remain roughly flat through 2016, at around 26,000 systems a year -- less than half the volume sold in 2008.
HP has been laying a path to help customers transition from Itanium to Xeon processors if they so wish. It is developing an Integrity Superdome server codenamed Dragon Hawk that will let customers use Itanium and Xeon server blades in the same chassis.
HP and Intel have also taken steps to reduce their Itanium development costs, by allowing Itanium to use the same chipsets and other external components as the Xeon. In November they said that would go further, allowing Itanium and Xeon to use the same motherboard and some "silicon-level" components.
That would have reduced costs further in the longer term, making continued Itanium development more viable. But the companies will no longer make that investment, at least for now. Sticking with the same manufacturing process will also save them some money. "Pulling the plug on 22-nanometer certainly reduces their R&D expense a whole lot," Brookwood said.