Microsoft names veteran Nadella as CEO

Microsoft has named company veteran Satya Nadella as its next chief executive officer, ending a longer-than-expected search for a new leader after Steve Ballmer announced his intention to retire in August.

Nadella, 46, is only the third chief executive in Microsoft’s 39-year history, following co-founder Bill Gates and Ballmer.

Microsoft also said on Tuesday that John Thompson, lead independent director, would succeed Gates as chairman.

Gates will assume a new role as technology adviser and retain a seat on the board, the company said in a statement.

Shares of the world’s largest software maker were up 1.1 percent in premarket trading following the news.

The choice of Nadella was widely expected, Reuters news agency reported, and investors and analysts are already weighing how effective the 22-year veteran will be in reigniting the company’s mobile ambitions and satisfying Wall Street’s hunger for cash.

Indian-born Nadella has been an executive in some of the company’s fastest-growing and most profitable businesses, including its Office and server and tools business.

For the past seven months, he was the executive vice president who led Microsoft’s cloud computing offerings.

Cloud computing is a new area for Microsoft, which has traditionally focused on software installed on personal computers rather than on remote servers connected to the internet.

Nadella’s section has been growing strongly, although it remains a small part of Microsoft’s current business.

Microsoft faces a slow erosion of its PC-centric Windows and Office franchises and needs to somehow challenge Apple and Google 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 analysts agree that Nadella’s background in creating cloud computing services 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.