Capellas Steps Down As HP's No. 2 ExecCapellas Steps Down As HP's No. 2 Exec

Hewlett-Packard is looking to start the new year with a clean slate, revealing Monday that its president and former Compaq CEO Michael Capellas is leaving HP. Speculation abounds that Capellas is being considered as a replacement for John Sidgmore, CEO of WorldCom, which is going through bankruptcy proceedings.

Capellas will relinquish his role as president of HP as well as his position on HP's board of directors on Dec. 1. He joined HP in May when the company bought Compaq for $19 billion after a contentious eight-month proxy vote battle among company management, led by CEO Carly Fiorina, and anti-merger forces led by Walter Hewlett, who had filed suit to stop the deal. Fiorina will re-assume the role of president, a title she held prior to the merger.

WorldCom would not comment on speculation that it's considering Capellas as a candidate to replace Sidgmore as CEO. But HP's announcement that Capellas was leaving to "pursue other career opportunities" came hours after The Wall Street Journal reported that he had become the front-runner to succeed Sidgmore.

Capellas' move isn't a surprise, particularly as HP closes out its fiscal year this month and looks to present a unified image moving forward, says Rich Partridge, VP of enterprise servers at D.H. Brown Associates. "There's only enough room for one person to call the shots, and Carly is firmly entrenched," he says. Still, Capellas, who joined Compaq in August 1998 as the company's CIO, has played an integral role in the transition process. Rather than wipe out the Compaq brand all at once, HP introduced a road map for migration following the acquisition. At this point, HP is signifying that it knows where it's going.

Capellas isn't likely to sit idle for long, Partridge says. "He's a good turnaround guy, as he did for Compaq when he took over," he says. "He's got good perspective on what to invest in and what to cut loose." For example, Capellas was behind Compaq's decision to phase out its Alpha chip in favor of Intel's Itanium platform.

Capellas held senior positions at Oracle and SAP America before joining Compaq. Prior to that, he founded and served as managing partner of Benchmarking Partners, an IT and supply-chain management consulting firm in Cambridge, Mass.