Microsoft To Name Satya Nadella New CEO?

After an intensive five-month search, Microsoft seems to have discovered its next CEO: Satya Nadella, 46, who has been serving as the company's enterprise and cloud chief.

While the decisions have not been finalized, sources told Bloomberg that the board was preparing to appoint Nadella as CEO and looking to replace co-founder Bill Gates as chairman.

Nadella would replace departing CEO Steve Ballmer, 57, and become the third CEO in the tech giant's history after Gates and Ballmer. He would also be distinguished as the most powerful Indian-born tech executive in the world, Reuters reported.

Two sources told the news service that Nadella will likely ask Gates to drop the chairman role and assist him "more closely with technology."

The decision to name Nadella the new CEO would come after five months of examining such candidates as Ford Motor Co. CEO Alan Mulally.

"It's a safe choice," Kevin Walkush, a business analyst at Jensen Investment Management told Bloomberg. "There's a large faction that wants a disruptive tech visionary to take over Microsoft and that group will probably be disappointed. Another group of people think we need a person like Satya who knows the business because it's so complex and needs someone who has the inside knowledge."

Microsoft is essentially hedging its bets with the internal hire, which could disappoint investors who were hoping for change.

"Shares might get a relief rally simply on closure of the issue even if the outcome is less than ideal," Todd Lowenstein, a Los Angeles-based fund manager at HighMark Capital Management Inc., told Bloomberg in an e-mail. "Shareholders were hoping for an outsider with a fresh perspective."

According to a Reuters source, Nadella's victory would be due to his innovation in Microsoft's server and tools business.

The company, which is in the middle of a reorganization process, is at a "crucial point" as Microsoft shifts from a focus on software to hardware and Internet-based services, Bloomberg reported.