HP, Compaq wrap up chief executive searches

HP and Compaq, two companies that seem to be heading down similar paths, went in opposite directions in choosing their next chief executive officers.

HP stepped outside of its own walls to tap the woman Fortune magazine dubbed the most powerful in American business — Lucent executive Carleton (Carly) Fiorina — as president and CEO. Compaq ended its four-month search for a CEO by appointing its chief operating officer, Michael Capellas.

Fiorina, who replaces Lew Platt, brings to HP 20 years of experience in the telecommunications industry. Most recently, Fiorina spent two years as president of Lucent’s Global Service Provider Business, which grew to become a US$20 billion business under her watch.

HP’s selection of Fiorina was greeted with optimism, both inside and outside the company. Particularly pleased were employees at HP’s eServices group, where there seems to be a feeling that the selection is a confirmation that this group represents the future of HP.

“Everyone’s very upbeat and excited that the company had the courage to bring somebody in from outside, somebody who is a dynamic individual and understands the role of brand as well as the future direction of services in the industry,” an HP official said.

To analysts, the move was a clear sign that HP’s board of directors is looking to the future and recognizing the convergence of communications, networks and computers.

“Carly is one of the most capable and talented executives I’ve met, and her telecom background will be invaluable as HP goes through some of the very same changes that Lucent went through,” said Jeffrey Kagan, a telecommunications analyst in Marietta, Ga.

Compaq, on the other hand, was expected to choose an external candidate for its top position. Thus the appointment of Capellas, who has been at Compaq since 1998 when he joined as CIO, came as a surprise. Capellas’ previous management experience included time at SAP and Oracle. At the latter, he served as senior vice-president and general manager at the company’s global energy business. Capellas assumed responsibility for Compaq’s overall strategic planning, organizational realignment and day-to-day operations on June 2, which should make his transition to CEO a virtually seamless one.

Compaq has disbanded the Office of the Chief Executive, consisting of Compaq executives Benjamin Rosen, Frank P. Doyle, and Robert Ted Enloe III, which was in place since former CEO Eckhard Pfeiffer resigned in April. The three will remain directors at Compaq, with Rosen continuing as chairman.

One analyst said Compaq made a good choice, considering the company’s current problems and its need to create an “air of stability.

“Customers weren’t looking for a big change,” said Rob Enderle, a senior analyst at the Giga Information Group in San Jose, Calif. “It signifies the thing customers want to hear: Compaq will get better over time.”