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January 26, 2009
By John C. Dvorak

    It's no coincidence that the computer industry peaked around the year 2000, went into a serious decline, stabilized at the low point a couple of years ago, and has since collapsed again.
    A confluence of reasons is responsible for this, but when it comes to the industry bringing this on itself, one major event may have taken down the entire business.
    I'm speaking about the announcement of the Itanium processor. This continues to be one of the great fiascos of the last 50 years, and not because Intel blew too much money on its development or that the chip performed poorly and will never be widely adopted. It was the reaction and subsequent consolidation in the industry that took place once this grandiose chip was preannounced.
    We heard that HP, IBM, Dell, and even Sun Microsystems would use these chips and discontinue anything else they were developing. This included Sun making noise about dropping the SPARC chip for this thing — sight unseen. I say "sight unseen" because it would be years before the chip was even prototyped. The entire industry just took Intel at its word that Itanium would work as advertised in a PowerPoint presentation.
    Because this chip was supposed to radically change the way computers work and become the driving force behind all systems in the future, one promising project after another was dropped. Why? Because Itanium was the future for all computing. Why bother wasting money on good ideas that didn't include it?
    The failure of this chip to do anything more than exist as a niche processor sealed the fate of Intel — and perhaps the entire industry, since from 1997 to 2001 everyone waited for the messiah of chips to take us all to the next level.
    It did that all right. It took us to the next level. But we didn't know that the next level was below us, not above.

(Adapted from PCMAG.COM)