The selection of Mr. Nadella to replace Steven A. Ballmer, which has long been expected, was accompanied by news that Bill Gates, a company founder, would step down from his role as chairman and become a technology adviser to Mr. Nadella.
John W. Thompson, 64, a member of the Microsoft board who oversaw its search for a new chief executive, will become the company’s chairman, replacing Mr. Gates.
‘During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,’ said Mr. Gates, who will remain a member of Microsoft’s board. ‘Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together.'
The selection of Mr. Nadella displays Microsoft’s directors wanted company insider and an engineer, suggesting that they viewed technical skill and intimacy with Microsoft’s sprawling businesses as critical for its next leader. It has often been noted that Microsoft was more successful under the leadership of Mr. Gates, a programmer and its first chief executive, than it was under Mr. Ballmer, who had a background in sales. Mr. Ballmer, 57, said in August that he was stepping down.
This selection in leadership comes at a time when Microsoft is defining itself as a service and device provider. As Microsoft's cloud and enterprise group chief, Nadella oversees the company's server software and back-end technology for corporate customers. He also is in charge of several consumer cloud products, including Office 365, as well as the Bing search engine, Xbox Live and Skype.
It remains to be seen whether Mr. Nadella’s technical background, along with the closer involvement of Mr. Gates in product decisions, will give the company an edge it lacked during the Ballmer years. Microsoft said in a statement that Mr. Gates will ‘devote more time to the company, supporting Nadella in shaping technology and product direction.’
The distinct difference between outgoing Mr. Ballmer and Mr. Nadella, as executive vice president of Microsoft’s cloud and enterprise businesses, Mr. Nadella would choose in his conversations and speeches the technical buzzwords that people outside the industry would most likely find challenging to process.
In an email to Microsoft employees on Tuesday morning, Mr. Nadella wrote that he is ‘defined by my curiosity and thirst for learning.’ He shares the thirst for knowledge with Gates.
Mr. Nadella’s became a leader at Microsoft in the past several years as he took charge of the company’s cloud computing efforts, a business considered vital as more business customers choose to rent applications and other programs in far-off data centers rather than run software themselves.
He engaged with the start-ups and spoke with them in order to become more responsive to their needs. This is the future for the tech industry leaders. Until Nadella addressed this issue as a vision for the future Microsoft had let others run with it.
‘When you look at the most exciting things happening in tech, all the platform shifts happening and disruption — social, mobile, cloud — Microsoft has not even been part of the conversation until recently,’ said Brad Silverberg, a Seattle-area investor and a former Microsoft executive. ‘With Satya’s leadership, Microsoft is doing interesting things in cloud.’
As chief executive of the entire 100,000-person company, Mr. Nadella will have to grapple with a much broader set of challenges in markets in which he has little experience, like mobile devices. He will inherit a deal to acquire Nokia’s mobile handset business, along with 33,000 employees, and a wide-ranging reorganization plan devised by Mr. Ballmer and still in progress.
During an interview in April, he said the most important factor in Microsoft’s ability to remain a growing business in the future was its ability to become a player in what he called new paradigms in computing, like cloud computing.
‘That is, you could say, the existential issue for us,’ Mr. Nadella said.
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