Steve Balmer has stepped down from his position as Chief Executive Officer, handing his role over to Satya Nadella and making him a member of the board of Directors effective Feb. 4. Nadella is the third CEO of Microsoft.
"Satya is a proven leader. He's got strong technical skills and great business insights," Balmer wrote in an email. "He has a remarkable ability to see what's going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way. I have worked closely with Satya for many years and I have seen these skills many times. He is not alone, though. Our Senior Leadership Team has never been stronger, and together this group will drive us forward."
Nadella, who has been working for Microsoft for 22 years, previously held the position of Executive Vice President of Microsoft's Cloud and Enterprise group. Nadella has played a major role in the company's move to using the cloud (a large network of computers connected through a communication network like the internet) and developing a cloud infrastructure that supports Bing, Xbox, Office, and other services.
"During this time of transformation, there is no better person to lead Microsoft than Satya Nadella," said Microsoft Founder and Board of Directors member Bill 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."
On the other hand, Bill Gates removed himself from the Chairman of the Board of Directors and has taken on a new role on the Board as Founder and Technology Advisor. For the past couple years, Bill Gates has turned his attention more towards humanitarian work and philanthropy alongside his wife through the Bill and Melinda Gates Foundation. He still will be involved with Microsoft, supporting Nadella in shaping and marketing the new technology and products.
"I'll have over a third of my time available to meet with product groups and it will be fun to find these next round of products working together," Gates said in a new video. "So there's a lot of opportunities in front of us and it's exciting that we have a strong leader to take us there."
John Thompson, lead independent director for the Board of Directors, will take over Gates' position as Chairman of the Board of Directors while resuming his previous position.
"Satya is clearly the best person to lead Microsoft, and he has the unanimous support of our Board," Thompson said. "The Board took the thoughtful approach that our shareholders, customers, partners and employees expected and deserved."
Nadella, born in India, is taking over Microsoft at a critical period. Many consumers and businesses have favored handheld devices produced by rival companies such as Apple Inc. over PCs. Microsoft's change in direction follows the worst decline on record for PCs in 2013. Shipments fell 10 percent and are expected to worsen through 2017. Before 2004, Microsoft's revenue growth averaged 24 percent; however, for the last 10 years it has only averaged 9.4 percent.
Not only will Nadella have to play catchup with Apple Inc. and Google Inc., he will be making strategy changes, which includes the $7.2 billion integration of Nokia's Oyj's handset product and turning Microsoft into a service and hardware provider.
"Microsoft is one of those rare companies to have truly revolutionized the world through technology, and I couldn't be more honored to have been chosen to lead the company," Nadella said. "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."