Compaq Taps Insider For CEO4:33 PM EST Thu. Jul. 22, 1999
Compaq Computer Corp. Thursday named insider Michael Capellas to serve as its new CEO, ending months of speculation about who would run the Texas computer giant.
Capellas, 44, succeeds former CEO Eckhard Pfeiffer, who left the company in April.
"Compaq has an unbelievable array of products, an unbelievable array of solutions and depth. We clearly have challenges [but] are on the right path and can be a great company," he said today in a conference call where he was introduced as CEO.
Capellas, who most recently held the role of acting COO, was responsible for overseeing the Compaq Enterprise Computing Group; Personal Computer Products Group; Consumer Products Group; North America Region; Europe, Middle East and Africa Region; Global Regions; and the Services and Supply Chain Management organizations.
Since Pfeiffer's departure, a trio of executives, including chairman Ben Rosen, has run the company. Rosen is expected to step out of the day-to-day management of the company, but remain chairman.
Capellas' appointment ends speculation that an outsider would take the top spot at the company. In recent weeks, a Continental Airlines executive said he was not a candidate for the job. Other potential candidates included Pete Hellman of TRW.
Compaq executives said the search did include outsiders. But ultimately the company concluded that Capellas had the skills required to return Compaq to its leadership position. Rosen says Capellas was the only executive--insider or outsider--offered the job. One insider describes Capellas as "technologically gifted, without an ego" while Rosen describes the man as having "a passion for winning" that makes him more optimistic than anytime since he joined the company in 1982.
As for Compaq, Capellas says the company remains the leader in non-stop computers and servers, while still enjoying the No. 1 PC brand. And he says the company's global services business unit has the partnerships, people and focus required to meet enterprise customer needs.
Capellas said the company will initiate changes to its product line-up beginning August 15. He identified four lines as strategic to the company: the Himalayan, non-stop computer line, the company's true 64-bit Unix software, the Open VMS software, and the industry standard Intel servers.
As for distribution, Capellas said the company was on track to launch on August 1 its previously announced Distributor Alliance Program. He also disclosed that direct sales are likely to increase as a percent of overall sales, including more than has been previously stated by the company. Capellas said direct sales, which today total just 15 percent of the company's business, will increase to 25 percent by the fourth quarter and to 40 percent next year. That will be achieved by taking more named, accounts direct and by increasing e-commerce sales to end users.
His top four priorities for the year include: completing the realignment of the product portfolio, completing the appointment of new managers, unifying the company's e-commerce strategy and rationalizing cost restructuring throughout the company.