Three-and-a-half years after Carly Fiorina stood onstage with Compaq CEO Michael Capellas and unveiled a stunning plan to merge their companies, the final act of that saga played out Wednesday, as HP's board brought down the curtain on Fiorina's reign as the company's leader.

Fiorina fought every inch of the way to pull off the historic, $21 billion merger, and in the end, she couldn't escape from its gravitational pull. The deal gave HP a vast product portfolio Fiorina pledged would be more than the sum of its parts. While Fiorina wrung out savings from streamlining operations, the merger hasn't translated to market dominance within HP's various divisions; of its major product lines, only its printer group holds an industry-leading position. HP's share price closed Tuesday down 33% from its price the on the day she was named CEO in July 1999.

"Ever since the merger, it's kind of been like shaky ground all the time," said Roger Cox, a research vice president with Gartner.

HP's board attributed Fiorina's dismissal to differences in how to execute the company's strategy, not over the strategy itself. Fiorina argued that HP needed diversity and bulk -- a plan that has come under fire from some analysts and investors eager to see HP jettison its struggling PC division and showcase its money-spinning printers line. Calls to split the company into parts are frequently issued, and with Fiorina's departure, the company's future as a whole is back in question.

HP's new chairman and interim CEO deflected queries on Wednesday's conference call with press about whether the board will consider a split, but they reiterated that HP isn't looking to change its strategy; it simply wants to speed its execution. One HP exec interviewed separately backed that view: "The management team and board are aligned on strategy," said Nora Denzel, HP's general manager of software and leader of the company's adaptive enterprise efforts. "The differences (between Fiorina and the board) were on how to execute the plan."

Fiorina has struggled for years with the operational end of her transformational vision. In November 2000, HP spent $470 million buying middleware maker Bluestone, only to later abandon the middleware business. Before landing Compaq, Fiorina negotiated with PricewaterhouseCoopers to buy its consulting business. That deal fell through over its price tag, which climbed as high as $18 billion. Two years later, IBM scooped up PricewaterhouseCoopers Consulting for $3.5 billion.

The IDG News Service is a Network World affiliate.

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