Solution Providers Not Surprised By Capellas Departure

HP said on Monday that Capellas will be leaving his post as president of the company and as a member of the HP board of directors to pursue other career opportunities. The president's position will not be replaced. The operating executives of the company who reported to Capellas will now report directly to Fiorina.

WorldCom declined to comment on reports that Capellas was set to become the next CEO of the ailing carrier. A WorldCom spokeswoman said that the carrier anticipates having a new CEO in place by the end of the year.

Todd Barrett, networking sales manager at CPU Sales and Service, a Waltham, Mass., solution provider, said Capellas did not have a "strong grip on the channel and how to make it successful."

Capellas' departure is to be expected in the wake of the HP acquisition of Compaq, said Barrett. CPU Sales and Service is re-evaluating its position as an HP solution provider, he added. "Over the next quarter or two we will be keeping a close eye on the direction that HP moves," he said. "We are really evaluating how much attention we want to put into keeping HP in our current accounts vs. focusing our attention on other products where the manufacturers have a little more focus on the channel.

"The signals that I have seen so far is that HP is already encamped in the direct model," said Barrett. "They already took two points off the agent program, and it seems like [HP commercials channel chief Kevin Gilroy and [HP Chairman and CEO Carly Fiorina are a little bit at [loose ends as to how important the channel is. At least now we know the buck stops with Carly. At least now we know who is making the calls."

John Sheaffer, president of Sysix Technologies, Westmont, Ill., said, "When Capellas made presentations to Wall Street analysts and pushed the direct model of the new HP, as a solution provider that bothered me. Carly, on the other hand, is trying to strike a balance between going direct on the PC side and, on the high end, maintaining HP's [channel engagement strategy. Carly provides a good compromise between two different cultures, and I don't think Capellas had the high-end, indirect channel mind-set."

Grady Crunk, executive vice president at Central Data, a Titusville, Fla., solution provider, said Capellas' departure is a plus for solution providers. "He never understood the channel, and he didn't understand customers," he said. "I think his legacy is going to be the man that destroyed Compaq and HP all at the same time.

"It is probably an advantage that he has left," added Crunk. "Hopefully, it will thin out the confusion and they can get stuff down through the channel. What is killing HP is no one knows who is doing what and where it is headed. %85 You talk to two people, you get two stories. You talk to three people, you get three stories. There is too much confusion."

Crunk said his HP business has dropped dramatically in the wake of an aggressive direct assault by the new HP. "We are not going out of our way to sell HP because we are not sure what type of partnership we really have," he said.

As for Capellas going to WorldCom, Crunk said Central Data is in the process of moving its WorldCom business to Qwest Communications International. "What is WorldCom thinking?" asked Crunk. "He wasn't successful at Compaq, and now they are asking him to save a drowning company. It is hilarious. Who is making that decision? Is there nobody else out there?"

Christina Torode contributed to this story.