Microsoft names Satya Nadella to run server/tools unit

Microsoft has promoted Satya Nadella to become president of its Server and Tools business, tapping him to lead the charge toward the company's most fervent hope for growth, cloud computing.

Nadella is Microsoft's first person of South Asian descent to serve as president of a major division, a milestone at a company that has swelled with engineers from India. At 43, Nadella will also be the company's youngest at that executive level.

He will head a division that brings in $14.9 billion a year, the company's third-largest group after the Windows and Office businesses. The group makes Windows Server, SQL Server and the cloud-computing platform Azure.

Nadella steps into the shoes of Bob Muglia, a Microsoft veteran. Microsoft said in January that Muglia was stepping down because Chief Executive Steve Ballmer wanted a change. Muglia will work with Nadella on the transition until he leaves in the summer.

Nadella said in an e-mail to the Server and Tools staff that Microsoft is on a path to change the world again with its cloud platform. "Today we are seeing our existing customers move to the cloud to address issues of cost and complexity; tomorrow, our work as leaders in innovation will result in new scenarios and workloads (some of them unimagined!) enabled in the cloud."

It's a cross-silo promotion for Microsoft since Nadella previously worked as senior vice president for research and development in the Online Services division, which runs Bing and MSN.

"In deciding who should take the business forward, we wanted someone with the right mix of leadership, vision and hard-core engineering chops," Ballmer said in an e-mail to all employees Wednesday. "We wanted someone who could define the future of business computing and further expand our ability to bring the cloud to business customers and developers in game-changing ways."

Ballmer also said in his e-mail that Amithabh Srivastava, a senior vice president for Server and Tools who seemed the heir apparent, is leaving. It's unclear where Srivastava will go next. He was named a distinguished engineer at Microsoft, and he helped build the Azure business from the ground up under Muglia. Bill Laing will replace Srivastava in the interim.

Nadella has been at Microsoft for 19 years. In the Online Services division, he worked on the engineering behind the Bing launch, MSN updates and integrating the Microsoft-Yahoo partnership to combine search and advertising on Microsoft's search engine and ad platform.

The company has drawn from that division's experience running Bing, Hotmail and MSN.com to build Azure. Nadella previously worked in Microsoft Business Solutions on Dynamics, the company's customer relationship management software.

Wes Miller, research vice president at Directions on Microsoft, an independent research firm in Kirkland, said Nadella has big shoes to fill, but he has solid experience launching new products in a crowded field.

"He's been very good at going in where Microsoft had to go up against a competitor," Miller said. "You look at Bing. Bing has turned into something that Google ... considers their main competition."

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com