Microsoft names cloud computing chief as next CEO

LOS ANGELES – Microsoft has named the head of its cloud computing business as the company’s next CEO, tapping a longtime insider to lead efforts to catch rivals in mobile devices and offer more software and services over the Internet.

Satya Nadella replaces Steve Ballmer immediately to become only the third chief executive in Microsoft’s 38-year history. Company founder and first CEO Bill Gates is leaving his role as chairman to serve as an adviser. He will spend a third of his time working on future products and technology.

Nadella, 46, most recently headed the company’s small but growing cloud computing unit, in which customers buy software and services housed on distant servers connected to the Internet. It’s a departure from Microsoft’s roots making software installed directly on personal computers.

In addition to growing that business, one of Nadella’s first tasks as CEO will be the completion of Microsoft Inc.’s $7.3 billion purchase of Nokia’s phone business and patent rights – part of a plan to boost Windows Phone software in a market dominated by iPhones and Android devices.

The direction points the company toward an orbit occupied by rivals Google Inc., Apple Inc. and Inc. and away from the core PC business that has been Microsoft’s mainstay.

“Going forward, it’s a mobile-first, cloud-first world,” Nadella said in a video accompanying the announcement Tuesday.

Nadella, who has worked at Microsoft for 22 years, vowed to remove any obstacles that prevent the company from innovating and said he would capitalize on Microsoft’s experience in making the industry’s leading productivity software package, Office.

“We need to be able to pick the unique contribution that we want to make,” he said. “That’s where our heritage of having been the productivity company … is what we want to get focused on.”

Gates, meanwhile, will remain on the company’s board. The new Microsoft chairman will be board member John Thompson, who led the search for a new CEO after Ballmer said in August that he planned to step down.

Thompson said Nadella was the board’s “first and unanimous choice.” Other candidates considered included Ford CEO Alan Mulally and other insiders such as Chief Operating Officer Kevin Turner and former Skype head Tony Bates.