FORTUNE -- Microsoft (MSFT) on Tuesday named Satya Nadella as its next chief executive officer, ending an extended search for a new leader. He's only the third CEO in the technology company's 39-year history, and previously served as executive vice president of Microsoft's Cloud and Enterprise group.
Steve Ballmer, who announced his intention to retire in August after 14 years on the job, will step down immediately. The company's shares were up slightly in morning trading.
Microsoft also named John Thompson as chairman of the company's board of directors, succeeding co-founder Bill Gates. Gates will become a "technology advisor," the company said. He will "devote more time to the company," it added.
In a memo to employees, Nadella wrote that Microsoft must thrive "in a mobile and cloud-first world."
"I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient," he wrote. "The coevolution of software and new hardware form factors will intermediate and digitize -- many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning."
He added: "To paraphrase a quote from Oscar Wilde -- we need to believe in the impossible and remove the improbable. This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to 'do more.'"
For more, don't miss Fortune's exclusive exit interview with Steve Ballmer.
The software giant soon will name a new leader after a tumultuous seven months of drama. A look back at the upheaval Microsoft's next CEO must address.
By Geoff Colvin and Adam Lashinsky, senior editors-at-large
FORTUNE -- Bill Gates was the star attraction at a private event that included some of Silicon Valley's young luminaries in San Francisco last October, but his planned topic, philanthropy, wasn't the most prominent topic on their MOREFeb 3, 2014 7:00 AM ET
As the world prepares for Microsoft to announce a new chief executive, we ask the company's top executives -- including the man himself -- to take a look at the legacy Steve Ballmer leaves on the technology company.
By Mary Jo Foley, special to Fortune
FORTUNE -- On the eve of his exit as chief executive officer of Microsoft, after more than a decade on the job, Steve Ballmer is more than MOREDec 11, 2013 5:00 AM ET
The outgoing CEO admits that Microsoft is still in the "early days" of a turnaround.
FORTUNE -- Microsoft CEO Steve Ballmer isn't done saying goodbye just yet. After a heartfelt speech to employees late last month, on Monday Ballmer published his final letter to shareholders, taking the opportunity to extoll the company's ongoing "transformation" into a devices and services provider and highlight its key milestones over the last year.
"We brought Windows MOREMichal Lev-Ram, writer - Oct 8, 2013 9:55 AM ET
Software hasn't just supplanted hardware in the past decade. It needs hardware as an ancillary business.
By Kevin Kelleher, contributor
FORTUNE – Imagine it's 1999. Scratch that, it's 2006.
The computer in your office is made by ... well, it doesn't matter who it's made by. Unless you are in a creative profession, that computer is run on Microsoft Windows. And the phone in your pocket is made by Nokia (NOK), or -- MORESep 4, 2013 10:02 AM ET
Why the Microsoft acquisition -- and Stephen Elop -- may turn out to be Nokia's greatest hope.
FORTUNE -- It's a sad day for Finland. Or is it? Sure, much of the phonemaker's storied legacy -- and future -- is now in Microsoft's hands, a bitter pill to swallow for many Finns. And yes, 32,000 Nokia employees will become part of the Redmond-based tech giant's empire overnight, whether they like it MOREMichal Lev-Ram, writer - Sep 3, 2013 2:53 PM ET
The former IBM chief has a stellar record. What better credentials could a new Microsoft CEO have than having humiliated and beaten his new charges?
FORTUNE -- When I reviewed Steve Ballmer's umpteenth structural reorganization of Microsoft last month -- was it only last month? -- I noted that the key missing ingredient to making the construct work was leadership. A re-jiggered Apple without Steve Jobs doing the jiggering never would MOREAdam Lashinsky, Sr. Editor at Large - Aug 27, 2013 10:13 AM ET
A former Windows product manager puts his finger on the difference between MSFT and AAPL.
FORTUNE -- If you read only one story Monday morning about Steve Ballmer's departure from Microsoft (MSFT), skip Kara Swisher's gossipy piece about how it happened more precipitously than Microsoft let on and go straight to Ben Thompson's If Steve Ballmer ran Apple on his stratechery blog.
In this provocative thought experiment, Thompson -- a former Microsoft MOREPhilip Elmer-DeWitt - Aug 26, 2013 7:41 AM ET
It's taken a couple of days for the import of Ballmer's retirement to sink in.
FORTUNE -- For a time in the mid 1980s, Steve Ballmer used to stop by my cubby hole at Time Magazine on his visits to New York. I was a struggling staff writer and he was Bill Gates' oversized salesman, but he didn't impress me as a man with a vision or deep knowledge of computers, MOREPhilip Elmer-DeWitt - Aug 25, 2013 5:52 AM ET
Investors cheered news that Microsoft CEO Steve Ballmer will retire, but there is no obvious successor in line.
FORTUNE -- It's hard not to feel a little bit bad for Steve Ballmer today. Not because he's finally giving up the reins at Microsoft, where his 13-year tenure as CEO has been a string of disappointments for investors, but because there's finally a figure -- arbitrary as it may be -- to MOREMiguel Helft, senior writer - Aug 23, 2013 12:43 PM ET
|The Deep Web you don't know about|
|Pizza chain Sbarro files for bankruptcy|
|Colorado gets $2 million from marijuana taxes|
|Invest $1 million, try for a U.S. green card|
|AT&T cuts prices again|