Not that simple
As I remember it, the HP/Intel tie-up looked like a good fit, even though in retrospect I would say that Intel took HP for a ride.
At the time HP decided to jump to a joint-developed chip with Intel, it was engaged in an arms-race with IBM. Tim said that it was the Itanium that made IBM invest in Power, but in actual fact this investment pre-dated the Itanium by at least 5 years. IBM bumped development of Power, PowerPC, RS64, and Power2-7 at various times, but it has been an almost continuous process if we overlook the stumble that happened with the 64 bit PowerPC 620 processor.
The original RIOS based IBM POWER systems, the RISC System/6000, was launched in 1990, and had been under development for at least 5 years before that. The driver was to be an industry leader in the Open Systems market place, as IBM had at last recognized that there was money to be made.
When first announced, the RS/6000 model 530 killed everything on the market stone dead, it was so much faster. HP had PA-RISC running in their MPE/iX line at the time, but it was not a single microprocessor, being built from discrete logic. The RS/6000 caused a huge stir, both because it was so much faster, and also because IBM put significant marketing weight behind their new systems. Sun were immediately knocked off the top of the workstation market, and never managed to really get back up there, and DEC invested heavily to try to produce a really hot chip in the Alpha, that was as a result of the need for speed, was significantly flawed and never really delivered on it's promise.
HP rushed systems to counter the RS/6000 based on the single chip implementation of PA-RISC, and running HP/UX. These were the HP 9000 model 720, 730 and 750, and the race was then on between IBM and HP to see who could have the fastest system. This reached it's peak in the late 1990's, when some models of RS/6000 had marketing lives of less than 6 months.
This was tremendously expensive, and HP, who did not have a big chip-fabrication division valiantly struggled to keep up, but was ultimately doomed to fail.
The way I remember the Itanium being pitched was that Intel were going to take on the development of the PA-RISC single microprocessor replacement, keeping most of the instruction set, but putting in features that would allow the processor to also run x86 binaries, and enhancing the x86 architecture for 64 bit. Intel would get access to HP's IP for the PA-RISC (which included high clock rate silicon and cache IP), and would use their considerable chip making skill to drive the product forward. HP would get a class-leading processor to keep their workstations and servers going. At least that is what was said by Intel.
What actually appeared to happen was that they designed Itanium to be their own processor, with less emphasis on making it a PA-RISC replacement, and more on trying to make it an upgrade path for 32bit x86 servers. They delivered it late, and the product did not live up to their claims as either a PA-RISC replacement, or a 64 bit x86 migration path. Intel attempted to use some of the IP to produce high speed x86 processors, but botched it with the Pentium 4, which was ultimately a dead-end.
Because of the delay, the world in general, and HP in particular, started looking elsewhere. HP appeared to loose interest in the UNIX market place, allowing both their own products and the subsumed products from DEC/Compaq (and to a lesser extent, Tandem) to fall into the legacy category. They produced Itanium based servers, but they were never up there with IBM, except in the very-large system market. Only customer pressure has kept many of the OS's alive.
In the meantime, IBM has been left with the only non-Intel/AMD UNIX offering that was actively being developed, and as a result, has kept market share. Even though there has been no real competitive pressure, IBM has used the convergence of the AS/400 and RS/6000 lines, and to a lesser but significant extent the z series, to move the architecture forward. They have borrowed from other IBM systems (and their competitors) to introduce type 1 hypervisors, hosted application partitions, and a pretty much unrivaled virtualization capabilities. The supported filesystems have scaled, the support for other technologies such as SAN and SVN has gone hand-in-hand with other IBM products.