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HP & Compaq
In the late 1980's, HP determined that their PA-RISC systems architecture for enterprise-class servers was going to hit a performance scaling threshold and began to investigate a new systems architecture, VLIW (Very Long Instruction Word).
In 1994, under the direction of CEO Lewis E. Platt, believing that it was no longer cost-effective for HP to have its own microprocessor foundry, the company ceased production and development of PA-RISC, shut down its own foundries and instead partnered with Intel to produce this new VLIW 64-bit enterprise chip, which came to be known as the IA-64.
Released by Intel and HP as the "Itanium" in 2001 after seven years of development and billions of dollars of R&D invested, the chip earned the early nickname of "Itanic" due to its low performance compared to less expensive, commodity x86 chips in most regular business applications. IA-64 also proved to be horribly slow when executing x86 instructions, which it had to do using software emulation.
Eventually, both AMD and Intel would produce 64-bit x86 systems, which when clustered in HPC configurations would easily outperform equivalent IA-64 systems for significantly less money.
IBM and Sun would continue to develop their POWER and SPARC architectures for their high-end servers, which eroded most of HP's high-end market share.
While other vendors such as Dell and IBM briefly introduced and sold Itanium-based systems, they shortly discontinued them. An executive at Dell publicly referred to the product as an "Albatross".
While the Itanium partnership with Intel surely started HP down the road to hell, it was accelerated in 2001 when HP, under the guidance of CEO Carly Fiorina decided to merge with Compaq in a $25 billion dollar deal.
Many large shareholders opposed the merger, including Walter Hewlett, the company's outspoken director and son of the company's co-founder, who engaged in a proxy battle in an attempt to prevent it. The prime objection was that Compaq had many overlapping product lines and would get the company involved in the low-margin PC business that its main competitor, IBM, was already in the process of exiting.
Compaq had only just acquired Digital Equipment Corporation (DEC) four years before, along with its powerful 64-bit Alpha RISC chip and Windows NT/Digital UNIX servers that had seen some moderate success in High-Performance Computing environments.
Seen by both executives at HP and Compaq as a redundant overlapping product under the new merged company and with Intel's IA-64 efforts underway, the Alpha -- arguably a much more mature, better supported and more desirable platform was phased out.
Under Carly Fiorina's reign, the merged "New" HP lost half of its market value and the company incurred heavy job losses. Fiorina stepped down in 2005.
Since the Compaq merger, HP has endured numerous problems with failed initiatives, dubious acquisitions (3COM, EDS, Palm, Autonomy) and has been plagued with ineffective management, including two major ethics scandals that have forced Chairwoman Patricia Dunn and two CEOs in succession, Mark Hurd and Leo Apotheker to resign.
Third-party OS development for Itanium other than HP's HP/UX UNIX derivative is now practically non-existent, as Microsoft no longer produces an IA-64 version of Windows Server. Itanium is considered to be a deprecated and legacy architecture by the Linux Kernel Project and is no longer actively supported by mainstream Linux distributions such as Red Hat, SuSE, Debian and Ubuntu.
HP is now the only company to sell Itanium-based servers under their Integrity brand, and Oracle is only begrudgingly still developing software for the chip, after entering and exiting litigation with HP over the matter.
Northern Telecom & Bay Networks
As part of the Bell Canada group of companies, starting with its formation in the 1890's, Northern Telecom Limited grew into a huge multinational telecommunications equipment manufacturer, and until the rise of Research in Motion, was the poster child for technological innovation in Canada.
During an expansion period during the internet boom of the late 1990s, the company acquired Bay Networks for $9.1 billion in 1998, which was formed only four years previous by the merger of two networking companies, Synoptics and Wellfleet. Synoptics was one of the earliest innovators of baseband twisted pair Ethernet products which had heavy penetration into the enterprise networking market, and Wellfleet manufactured enterprise routers and was a heavy competitor to Cisco.
As a result of the merger, the company renamed itself Nortel Networks. In the hopes that the company would make tremendous profits from the the sale of fiber optic network communications equipment, huge speculation of the stock on Wall Street cranked up the price of the company's shares to ridiculous levels, this despite that the company was unable to be profitable, quarter after quarter.
After numerous efforts to restructure the company and financial mismanagement scandals over a period of about ten years, the company filed for Chapter 11 in January of 2009, and its various businesses were eventually liquidated.
Microsoft & DANGER, Inc.
Danger Inc, formed in the year 2000 by executives from Apple, WebTV and Philips was a company that specialized in software and services for mobile computing devices. The company was best known for a mobile smartphone/messaging device called the T-Mobile Sidekick, which was also branded as the Danger Hiptop.
In 2008, Microsoft purchased the company for an undisclosed amount, but the price was rumored to be around $500 million. Post acquisition, the employees were all absorbed into Microsoft's Mobile Communications Business (MCB) where they went to work on a future mobile phone platform.
While this future device development was underway, in October 2009, Danger incurred a catastrophic data loss resulting in complete business continuity failure at one of its data centers. This data center was hosting personal customer data used by the T-Mobile Sidekick product that eventually took two months to recover from.
The highly publicized fiasco undermined consumer confidence in the product, and it resulted in T-Mobile canceling the Sidekick in the summer of 2010.
And that future mobile phone platform that the Danger developers were working on at Microsoft?
After two years of effort approximately $1B worth of development, it became the Microsoft Kin, and two versions were launched exclusively on Verizon in April of 2010. The devices were utterly savaged by the press for their lack of key features such as Instant Messaging, Calendaring, GPS navigation and memory expansion.
After 48 days on the market, the product was pulled.
Microsoft has since launched a much better mobile device platform in the form of Windows Phone, but the KIN will always be a hard learned lesson for the company.