Michael Capellas, the newly-appointed chief executive of Compaq Computer, which employs more than 2,000 people in Ireland, faces many challenges as he attempts to return the company to profitable growth. First, however, he must persuade shareholders and customers that he was not the candidate of last resort.

Mr Capellas' appointment last week came as Compaq faced mounting pressure to fill the void created by the removal of Eckhard Pfeiffer, its long-time chief executive in April.

With the computer company's less than impressive quarterly results earlier this week,it needed to give analysts reason to believe the future would be more promising.

Moreover, Hewlett-Packard's choice last week of Carly Fiornia, an accomplished Lucent Technologies executive, as its CEO only added to the growing perception that Compaq was struggling to attract top quality candidates.

After searching outside the company and even outside the computer industry, Compaq's board had concluded that Mr Capellas - an insider, albeit a newcomer to Compaq - was the man for the job, said Ben Rosen, Compaq chairman.

Mr Capellas' career trajectory at Compaq has been extraordinary. He joined the company less than a year ago as chief information officer and was elevated to the post of acting chief operating officer last month following the departure of several senior executives.

Prior to joining Compaq he spent 18 years in IT management at Schlumberger, the oil exploration company, followed by a few months with an IT consulting group and a short spell at Oracle.

Although he may lack experience running a large company, Mr Capellas had demonstrated his capabilities over the past few weeks "exceeding our already high expectations", said Mr Rosen.

In his first public appearance as chief executive, Mr Capellas claimed to be more than ready to take on the task and spoke candidly about what needed to be done to put Compaq back on track.

Compaq's problems date back to two large acquisitions - of Digital Equipment last year and of Tandem in 1997 - which were designed to transform it from a personal computer company into a "full line" computer company offering products ranging from hand-held computers to high-performance systems, as well as consulting services.

However, the acquisitions confused Compaq's marketing messages and created a mix of overlapping products, Mr Capellas acknowledged. More focused rivals such as Sun Microsystems and IBM had done better in positioning themselves as the primary suppliers to businesses getting on to the Internet, he said.

Mr Capellas' strategic solution is threefold. First, eliminate overlapping products and marketing messages. As part of that move Compaq is realigning its business into three divisions: one aimed at large systems and services for enterprises, one at selling PCs and one aimed at the consumer market.

His next move is to get costs under control. This involves slimming some overstaffed operations and cutting inventories.

Simplifying Compaq's sales channels is also a high priority. The company, which traditionally relied upon third parties for its PC sales, has been slow to make changes for fear of disrupting this reseller network. The large Compaq sales force added with the Digital acquisition has also clashed with resellers.

In the consumer market Compaq faces a similar challenge, moving more of its sales on to the Internet where it is far behind its toughest competitors.

Mr Capellas' next priority is to articulate a clear strategy for "ebusiness". The Internet is the "integration point" of everything that Compaq does, he said.

Mr Capellas' success will depend heavily upon his operational capabilities, which are his strong hand. However, Mr Rosen - and Compaq's shareholders - are looking to him to achieve a turnround "at Internet speed".