Microsoft board to name CEO soon

The company is likely to appoint its cloud-computing head, Satya Nadella, as its next CEO.

Microsoft Corp is likely to appoint its cloud-computing head, Satya Nadella, as its next CEO.

NEW YORK - Microsoft Corp is likely to appoint its cloud-computing head, Satya Nadella, as its next chief executive, a source familiar with the matter said, as the board concludes a five-month search for a tech-savvy heavy-hitter to lead the world's largest software company.

As part of the move, co-founder Bill Gates may step aside as chairman and be replaced by lead independent director John Thompson. Gates would remain a director, the source added.

Rising star Nadella, a native of Hyderabad, India - where Microsoft has its largest non-US research center - was promoted to run the company's fast-expanding cloud, or internet-based, computing initiatives in July last year as part of current CEO Steve Ballmer's radical re-organization of the company.

The appointment of the 22 year Microsoft veteran would make him the most powerful Indian-born tech executive in the world and put him alongside PepsiCo Inc's chief, Indra Nooyi, as the leader of a well-known, large-cap US corporation.

Born in 1967 and educated in India and the US, Nadella's tech career started at internet software pioneer Sun Microsystems. He joined Microsoft in 1992 and quickly climbed the corporate ladder with leading roles in the Office and Bing search-engine teams.

He was promoted to run the company's server and tools unit in 2011. That unit now forms the backbone of Microsoft's cloud-computing platform, which Nadella runs under his official title of executive vice president, cloud and enterprise.

"He's a solid choice," offering continuity of strategy and proven execution, said Sid Parakh, an analyst at fund firm McAdams Wright Ragen.

Some investors had campaigned for an external CEO who might be more likely to shake up the company and reward shareholders with greater dividends and share buybacks, but Parakh said that did not mean Nadella would be unpopular with Wall Street.

"Any new CEO is going to have to have the shareholders' say in mind. But it's not certain that will translate into actions," said Parakh.

If Nadella is named CEO, it is likely Thompson will help out on the crucial task of managing Microsoft's relations with its powerful Wall Street investors, the source added.

The appointment of a company veteran like Nadella, which follows a flirtation with outsiders such as Ford Motor Co Chief Executive Alan Mulally, could disappoint some investors who want a more radical transformation at the software giant.