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Digital and Compaq have never been able to figure out how to make Alpha popular enough to be profitable. That's the fundamental reason Compaq isn't going ahead with EV8. That means they had three choices for what to do with OpenVMS:
1) drop it altogether
2) port it to another platform
3) bleed money until the corporation is insolvent
Surely the first choice was the best for Compaq's customers.
It also isn't hard to understand why Compaq's chose Itanium. The possible choices were SPARC, MIPS, POWER and Itanium. Neither SPARC nor MIPS offers exceptional performance on the type of applications Alpha is good at. POWER would be an option, but IBM is a competitor and Compaq already has a working relationship with Intel. Besides, with the Alpha engineers working for Intel, future versions of Itanium are bound to have better performance.