Microsoft names Satya Nadella to replace Steve Ballmer

Indian-born Satya Nadella has risen through the ranks of Microsoft since joining the company in 1992

Technology giant Microsoft has announced that Satya Nadella will be its next chief executive.

Indian-born Mr Nadella is currently Microsoft's head of Cloud and Enterprise, which builds and runs the firm's computing platforms and developer tools.

He takes over from Steve Ballmer who announced plans to step down last year.

Company founder Bill Gates said there was "no better person to lead Microsoft".

Mr Gates is stepping down as chairman, it was also announced, but will take up a new role as a technology adviser and will also retain a seat on Microsoft's board.

Microsoft's lead independent director John Thompson will take over as chairman.

'Proven leader'

"Microsoft is one of those rare companies to have truly revolutionised the world through technology, and I couldn't be more honoured to have been chosen to lead the company," said Mr Nadella.

"The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. A big part of my job is to accelerate our ability to bring innovative products to our customers more quickly."

Mr Nadella, 46, is Microsoft's third chief executive. The Hyderabad-born executive joined the company in 1992 and has degrees in electronics, computer science and business administration.

He previously led its server and tools business before being put in charge of the unit that built Microsoft's Cloud OS service, which powers products such as Bing, Skype and Xbox Live.

"During this time of transformation, there is no better person to lead Microsoft than Satya Nadella," said Mr Gates.

"Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth."

Mr Gates' appointment as a technology adviser is seen as significant, suggesting he may again take a more hands-on role in the company he founded nearly 40 years ago.

In a video statement, he said the job would mean "substantially increasing the time that I spend at the company", working with product development teams.

Experience concerns

Mr Nadella's appointment ends months of speculation over who would succeed Mr Ballmer, who announced his intention to stand down in August last year.

At one stage incoming chairman John Thompson said more than 100 possible candidates had been identified.

Rumoured to be among them were the boss of car giant Ford, Alan Mulally, and Nokia chief executive Stephen Elop.

How the new chief executive deals with Nokia will be closely watched

Investors have been calling for new leadership at the Microsoft, saying it needs a significant shakeup in order to become more innovative and profitable.

Some analysts suggest Mr Nadella's background in cloud computing - a growth area for Microsoft - will be advantageous.

"Satya was really one of the people who helped build up the commercial muscle,'' said Kirk Materne, an analyst with Evercore Partners.

"He has a great understanding of what's going on in the cloud and the importance of delivering more technology as a service."

But some critics have questioned whether Mr Nadella is the right man for the job.

He has no experience of running a company, let alone one as big as Microsoft. There are also concerns that Mr Gates and Mr Ballmer will continue to exert influence over the direction of the company.

"We do not want to see a continuation of the existing direction for the business, so it will be important that Mr Nadella be free to make changes,'' said Nomura analyst Rick Sherlund.

Microsoft shares, having risen 1% in early trading, closed down 0.4%.