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Microsoft insider Satya Nadella to be its CEO

Bill Gates leaves chairman’s job, will advise chief

New CEO Satya Nadella (center), addressed employees along with Bill Gates (left) and outgoing CEO Steve Ballmer.

Microsoft Corp. via Reuters

New CEO Satya Nadella (center), addressed employees along with Bill Gates (left) and outgoing CEO Steve Ballmer.

SEATTLE — Microsoft said on Tuesday that Satya Nadella will be its next leader, betting on a longtime engineering executive to help the company keep better pace with changes in technology.

The selection of Nadella to replace Steven A. Ballmer, which was widely expected, was accompanied by news that Bill Gates, a company founder, had stepped down from his role as chairman and become a technology adviser to Nadella.

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John W. Thompson, 64, a member of the board who oversaw its search for a chief executive, became chairman.

Satya, Gates said, “is a proven leader with hard-core engineering skills, business vision, and the ability to bring people together.”

In Nadella, Microsoft’s directors selected both a company insider and an engineer, suggesting they view technical skill and intimacy with Microsoft’s sprawling businesses as critical. It has often been noted that Microsoft was more successful under the leadership of Gates, a programmer and its first CEO, than it was under Ballmer, who had a sales background. In August, Ballmer, 57, said he was stepping down.

Nadella, 46, from Hyderabad, India, is the third chief executive of Microsoft, an icon of US business that has struggled for a position in big-growth markets like mobile and Internet search. The company has correctly anticipated many of the biggest changes in technology — the rise of smartphones and tablet computers, for example — but has often fumbled the execution of new products.

It remains to be seen whether Nadella’s technical background, along with the closer involvement of Gates in product decisions, will give the company an edge. Microsoft said Gates will “devote more time to the company, supporting Nadella in shaping technology and product direction.”

Gates said Nadella asked him to make the change in his duties at Microsoft.

Most recently the executive vice president of Microsoft’s cloud and enterprise businesses, Nadella peppers his conversations with technical buzzwords that people outside the industry may find impenetrable. As CEO of the entire 100,000-person company, Nadella has to grapple with a broad set of challenges in markets in which he has little experience, like mobile devices. He inherits a deal to acquire Nokia’s mobile handset business, along with 33,000 employees, and a wide-ranging reorganization plan devised by Ballmer and still in progress.

In July, Nadella said he supports the reorganization, which he predicted will allow Microsoft to adapt to market changes more quickly. In April, he said the most important factor in its ability to remain a growing business is 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,” he said.

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