Compaq Computer has promoted Michael Capellas, one of its own executives, to become president and chief executive three months after the shock ousting of Eckhard Pfeiffer in April.
The move surprised many industry watchers because they had expected the struggling PC maker to appoint an outsider to make the necessary changes to restore it to profitability.
But Capellas said he offered the company 'the best of both worlds." Not only had he been with Compaq for a year, which had given him the time and opportunity to understand what the company's assets were, but he was also still new enough to see clearly what needed to be done.
Ben Rosen, Compaq’s chairman and founder, who ousted both Pfeiffer and Rod Canion, the firm’s original chief executive, explained the delay in appointing a successor.
"As part of our due diligence, it behooved us to look at all the available candidates. We thought from the beginning that Michael was one of the outstanding candidates, but we really had, as fiduciaries, to look at others. But it became clear that he was head and shoulders above all the others we looked at,” he said.
He added that one of the reasons Capellas was chosen was for his deep understanding of ecommerce, which was going to be vitally important to Compaq in the future.
But Capellas said his first task would be to deliver a clear message to customers about the company's capabilities. "We have a tremendous portfolio of assets and a tremendous portfolio of products to offer," he said.
He added, however, that more cost cutting measures would be introduced, particularly in manufacturing.
Rob Enderle, an analyst with Giga Information Group, said the task facing Capellas was "Herculean" because he needed to integrate Digital Equipment, strip out any excess costs and move the company to a more direct sales model.
Capellas was originally appointed as Compaq’s chief information officer a year ago, but has been its acting chief operating officer since the beginning of June.
He joined the vendor from Oracle, but had also previously worked for SAP and his career began in 1976 when he joined a US steelmaker as a systems analyst.
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