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Hope springs eternal for MCI's Capellas

The bubble may have burst and computing companies may be struggling, but MCI chief Michael Capellas has rosy projections that harken back to a more optimistic time.

NEW YORK--The bubble may have burst and computing companies may still be struggling, but MCI Chief Executive Michael Capellas has some rosy projections that harken back to a more optimistic time.

Capellas, speaking here Wednesday at the first American incarnation of the CeBit trade show, urged his audience to have faith that the Internet, servers, PCs and mobile phones are becoming more important to corporations and consumers.

"While it slowed down from a business model point of view, under the covers, the actual drive to the Internet continues," he said. "The consumer appetite continues to grow unabated."

That optimism doesn't stem from ignorance of recent upheaval in the technology world. Capellas gave up his post atop Compaq Computer to become president of Hewlett-Packard as the two companies merged just over a year ago in a consolidating PC, storage and server market. Then, in November, he took over at financially troubled WorldCom, now renamed MCI, and took on Herculean business challenges.

In Capellas' admittedly telecommunications-centric view, the future of computing will center on a pervasive Internet backbone that links innumerable servers and data storage devices. Voice and data communications will converge, and Web services standards will break down barriers that currently prevent different systems from communicating with each other.

"Those who are ignoring technology today just because they have a little extra capacity," he said, will be left behind those who are rebuilding now in order to be ready for new growth.


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Capellas has adjusted his thinking since his days leading Compaq and HP, which both have had stints as the top PC seller. He now gives PCs a more peripheral role, used more to access critical data stored on central servers rather than to store that data themselves. Putting information in a central location enables any number of devices to reach it--phones, computers or wireless gadgets.

"We want to move the data server-side so we can approach it from all these devices," Capellas said.

Doing so, however, will require improvements to computer security as people with different privileges share the same network. "I'm amazed at the number of people who think there is a silver bullet for security," Capellas said.

And for those central servers, Capellas gave a nod to some of HP's fiercest competitors. In developing the next-generation fabric of interconnected servers, the "industry leaders" include not just HP and its close partner Microsoft, but also IBM, with its push for "grid" computing, and Sun Microsystems, with its plans for network computing.

While businesses remain important, consumers are leading the charge today for new technology, Capellas said, pointing to home networks, video and audio streaming, instant messaging and high-speed, or broadband, Internet connections.

The problem of the "last mile"--the slow and expensive connections to computer users' homes--has been holding back the potential of the fully networked future. It's a problem that's getting fixed, he said.

Neighborhood wireless hubs and broadband connections over cable TV lines are providing some competition that can sidestep the difficulties that outside companies have had in getting access to phone lines in people's homes, he said. These days, Capellas said, "I think broadband adoption is coming pretty fast."