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Insider to refresh Microsoft for mobile age

Microsoft's mission to find new glory in the mobile Internet age is now in the hands of long-time company insider Satya Nadella, who on Tuesday became the third chief executive in the aging titan's history.

WASHINGTON: Microsoft's mission to find new glory in the mobile Internet age is now in the hands of long-time company insider Satya Nadella.

The Indian-born cricket lover on Tuesday became the third chief executive in the aging titan's history.

He now faces the challenge of revitalizing Microsoft in a world shifting from desktop computers to smartphones, tablets and software offered as services in the Internet "cloud."

The 46-year-old will have as an advisor Microsoft's first chief, company co-founder Bill Gates, who shed his title of chairman for a more hands-on role.

"There is only one thing they can do, and that is lead," analyst Merv Adrian said of Microsoft.

"There is an impression they have fallen behind," Gartner's research vice president added. "Satya's challenge is to reverse that in perception and in action."

Gates was an early advocate of tablet computers and smartphones, but Microsoft failed to effectively execute on his vision. Nadella has proven prowess at execution, based on his successes during his 22 years with Microsoft.

Nadella was most recently executive vice president of its "Cloud and Enterprise group."

He marked his promotion by reaching out to employees, partners and customers with a vow to put the company's software at the heart of changing Internet lifestyles.

"We are living in a cloud-first, mobile-first world," Nadella said in a webcast.

"That is the world we are building for, and all of this is going to be mediated by software."

His battle plan includes luring users to Microsoft's Surface tablets, Xbox videogame consoles, and Windows-powered mobile phones from Nokia.

Microsoft's acquisition of Nokia is expected to be finalized in the coming months.

As people increasingly use the same smartphones or tablets at work and at home, Microsoft must bridge the two worlds with software that gives companies security they crave, Nadella said.

Gates called Nadella "a proven leader with hard-core engineering skills, business vision and the ability to bring people together."

"As the industry changes we have to innovate and move forward," the 58-year-old said.

Gates stepped down as CEO in 2000 and left day-to-day operations in 2008 to devote more time to his multibillion-dollar Bill and Melinda Gates Foundation.

Nadella takes over from the retiring Steve Ballmer.

Analysts enthused

The shake-up at Microsoft drew positive responses from industry watchers.

"I think this is a terrific development for the company," said Greg Sterling at Opus Research.

Nadella is a more humble and understated figure than Ballmer, which bodes well for Microsoft's image, and has a strong mix of business and technology expertise, he added.

Frank Gillett at Forrester Research was encouraged by Nadella's apparent willingness "to shake things up."

By using Gates as a key advisor, Nadella is tapping into the Microsoft co-founders' winning experiences while signalling a new era by keeping him in an informal role, he said.

Deutsche Bank's Karl Keirstead called Nadella a "good choice."

"Although Microsoft is a big ship to turn, in our view Nadella will push to make Microsoft more innovative and agile, more like Apple and less like IBM," Keirstead wrote in a research note.

Matthew Hedberg at RBC Capital Markets deemed Nadella "a safe choice" and said his background "could mean a bigger emphasis on cloud and enterprise than Microsoft has had in the past."

Nadella heads the team that runs the public, private and service provider clouds for Microsoft. Previously, he was president of Microsoft's US$19 billion server and tools business.

He is a native of Hyderabad, India, and earned degrees from Mangalore University, the University of Wisconsin in Milwaukee and the University of Chicago.

Growing up, Nadella loved cricket so much that he played competitively on his school team.

Today, he says the sport taught him about teamwork and leadership.

A document filed with US stock market regulators said Nadella's base salary would be US$1.2 million, plus cash incentives worth up to three times his salary depending on company performance.

He will also get a stock award worth US$13.2 million for the 2015 fiscal year, plus additional stock as a one-time grant.

Microsoft shares closed down 13 cents, or 0.36 per cent, to US$36.35.

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