It seems as though the road Intel is traveling down with the Itanium has been long and bumpy. The IA-64 architecture looks to be taking another hit, as Dell will be discontinuing sales of Itanium-based servers. It's part of Dell's decision to stay away from the "big iron" server market. Instead, the Texas-based computer maker will concentrate on promoting and selling x86 servers using both 32-bit and 64-bit Xeons.
Itanium 2 PowerEdge 7250 servers are currently available from Dell (sorry, no coupon codes), but one can only find them by searchingItanium systems are no longer promoted on the company's website.
When Intel first released the Itanium, Dell was a bit skeptical about its prospects. The company sold an Itanium workstation, but dropped it back in late 2001. However, Dell had a change of heart in November 2002 when it decided to sell Itanium 2 servers instead of AMD's Opteron.
The Itanium 2 has not been the strong player in the 64-bit server market that Intel hoped it would be, and I'm beginning to wonder if it has much of a future in front of it. 2004 sales fell far below Intel's targets, and Dell isn't the only company to drop the Itanium this year. IBM phased it out in February in favor of severs running its own POWER CPUs.
In hopes of reinvigorating the Itanium 2, a new Itanium Solutions Alliance was launched by Intel and HP (which has invested heavily in Itanium development since the mid 1990s) late last month. The dual-core Montecito is due early next year, along with a unified chipset for the 64-bit Xeon and Itanium 2 CPUs. Intel's problem is that the server market has changed markedly since the Itanium and its IA-64 ISA was originally envisioned as a replacement for x86. The last two years alone have seen the introduction of inexpensive 64-bit x86 CPUs in the form of the AMD Opteron, which proved popular enough to force Intel into the AMD-created budget x86 server market.
In addition, Microsoft has been scaling back support for Itanium 2 in its OS releases. Windows Server 2003 R2 won't support it, and Longhorn Server will only have support for "higher-end jobs" on Itanium 2. That means no support for "fax server, Windows Media Services, Windows SharePoint Services, file and print servers, and others," according to Microsoft's bulletin.
Taken together, Dell's decision to drop out of the Itanium server market makes sense. The future of 64-bit servers for Intel is beginning to look a lot more like x86-64 than IA-64, which may ultimately lead to the Itanium 2 suffering a slow death by a thousand paper cuts.
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An Intel spokesperson confirmed Thursday that Dell would no longer be offering servers with Intel Itanium CPUs.  The spokesperson said "Losing Dell as an Itanium customer is unfortunate but frankly, we see their impact as negligible."  Servers with Itanium CPUs are no longer promoted on Dell's website, though a few can be found by searching.
 
Dell is the largest seller of computers with Intel processors. Dell currently sells 10.5 percent of all servers worldwide. The majority of Dell servers use an IA-32 (colloquially "x86") chip, but a growing number use the 64-bit Intel Xeon. Sales of Itanium servers have been very poor; last year Dell sold only 1,371 Itanium servers, up from 12 the previous year. In February, IBM also phased out Itanium-based servers, replacing them with IBM Power CPUs. Fujitsu, HP, Hitachi NEC, SGI and Unisys are the only major manufacturers to still offer Itanium-based servers.

The Intel Itanium was designed in the early 1990s. It was intended to be the processor of choice for 64-bit computers, but the processor suffered from several major flaws preventing widespread adoption. Unlike competing AMD64 chips, the Intel Itanium uses a different instruction set from IA-32 chips. An emulation feature allows them to run IA-32 code, but only very slowly; users were forced to choose between accepting greatly-reduced performance and expending time and programmers' salaries porting their software.  Even Intel has acquiesced to AMD's leadership in this field, designing chips with a compatible EM64T technology.