Nadella outran better-known candidates for Microsoft CEO

Fri Jan 31, 2014 6:31pm EST
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By Nadia Damouni and Bill Rigby

NEW YORK/SEATTLE (Reuters) - The race to determine the next head of Microsoft Corp looks to have ended where it began, with the software giant poised to take the route of least risk and tap rising internal star Satya Nadella for the job.

After a bruising, five-month selection process, the list of contenders was cut to six serious candidates, with the chief executive job nearly going to Ford Motor Co CEO Alan Mulally, an outsider favored by investors lobbying for radical change.

If Nadella wins the day, as expected, it will be for his innovative work on Microsoft's growing server and tools business, which provides online computing and storage for companies, said a source briefed on the search process.

Nadella is in discussions with the board, and is likely to ask that Microsoft co-founder Bill Gates drop his chairman role and help Nadella more closely on technology, two sources said.

It is not clear why Nadella might want a role change for Gates. The presence of Gates and current CEO Steve Ballmer on the board has deterred some external candidates who feared they would meet resistance if they want to make fundamental changes, sources have told Reuters over the past few months.

Nadella is praised for his role in overseeing growth in the company's cloud computing and Bing search engine business, and as a technologist with a talent for marketing. Critics say he failed to halt Google Inc's dominance in the search engine business. They say Microsoft's entry into the cloud-computing arena was late and clunky, allowing Inc to set the standard in providing online computing platforms for companies

It remains unclear whether the 46-year old Indian-born executive will meet some investors' desire for more radical moves at the software maker, after Ballmer announced in August that he planned to retire.

"From the technical side, Mr. Nadella is a good choice," said Rick Sherlund, an analyst at Nomura who publicly lobbied for an outside candidate who would shake up Microsoft and maximize returns to shareholders.   Continued...

Satya Nadella, executive vice president, Cloud and Enterprise, addresses employees during the One Microsoft Town Hall event in Seattle, Washington in this July 11, 2013 photo made available to Reuters on January 30, 2014. REUTERS/Microsoft/Handout