Microsoft has named 22-year company veteran Satya
Nadella as its next chief executive officer and said
co-founder Bill Gates would step down as chairman and advise
the new CEO on technology, marking an epochal change of
control at the company that drove the PC revolution.
Nadella, a 46-year old born in India who led the creation of
Microsoft's Internet-based, or "cloud" computing services, is
only Microsoft's third CEO in 39 years, taking over from
Steve Ballmer, who inherited the job from Gates in 2000.
The move ends a five-month search process at the Redmond,
Washington-based company, triggered by the August
announcement of Ballmer's decision to retire. That was longer
than many investors had expected.
"It's a relief this process is over," said Daniel Ives, an
analyst at FBR Capital Markets. "Many investors view it as
the 'safe pick' as Mr. Nadella is a born-and-bred Redmond
insider. But the uphill battle continues for Microsoft on its
path to growth."
Microsoft's new chairman John Thompson, who led the search
for a CEO, said the process went as planned.
"We aimed to complete the process within four to six months,
and we met that goal," Thompson said in a video statement on
Microsoft's website. "After reviewing all of the candidates,
Satya was our first and unanimous choice."
Gates said Nadella's experience in cloud computing made him
the right man to lead Microsoft, as the company struggles to
find its feet in the new arena of mobile computing.
"Satya's got the right background to lead the company during
this era," said Gates. "There's a challenge in mobile
computing. There's an opportunity in the cloud."
Thompson did not mention other candidates, although sources
close to the company have told Reuters that at one time Ford
Motor Co CEO Alan Mulally was a leading contender.
As he relinquishes the chairman's title, Gates will stay on
the board and assume a new role as technology adviser to
"Satya's asked me to step up, substantially increasing the
time that I spend at the company," Gates said in a video
statement. "I'll have over a third of my time available to
meet with product groups. It'll be fun to define this next
round of products, working together."
Gates left day-to-day work at Microsoft in 2008 to focus on
philanthropy at his Bill & Melinda Gates Foundation,
which he says is still his main job.
Shares of the world's largest software maker were up 0.2
percent at $36.54 on the Nasdaq on Tuesday morning.
Nadella, who describes himself as a cricket and poetry lover,
called the appointment "humbling" in an email to the
company's employees. In a videotaped statement he said he
would focus on "ruthlessly" removing any obstacles to
innovation at the company.
Apart from Mulally, Nadella also beat out various other
candidates for the job. Several were close to the company,
like Stephen Elop, who is set to rejoin Microsoft when its
acquisition of Nokia's handset business closes, and Tony
Bates, the former Skype boss now in charge of Microsoft's
Investors and analysts are already weighing how effective
Nadella will be in reigniting the company's mobile ambitions
and satisfying Wall Street's hunger for cash.
Microsoft faces a slow erosion of its PC-centric Windows and
Office franchises and needs somehow to challenge Apple Inc
and Google Inc in the new realm of mobile computing. At the
same time, some investors are campaigning for retrenchment
and a bigger cut of the company's massive cash pile.
Most agree that Nadella's background makes him a safe pair of
hands to take the company forward, but there remains a
question over his ability to make Microsoft a hit with
consumers or with impatient shareholders.