* Bing engineering chief Nadella to head unit
* Muglia departure announced last month
* Shares down 1 percent
(Changes dateline from NEW YORK, adds background, analyst
By Bill Rigby
SEATTLE, Feb 9 Microsoft Corp (MSFT.O) put
veteran insider Satya Nadella in charge of its $15 billion
server and tools business as it looks to an expert engineer to
revitalize its push into cloud computing.
Nadella, 43, is a rising star at the company after leading
engineering efforts for Microsoft's online services business,
including the search engine Bing, which has made headway
against market leader Google Inc (GOOG.O).
He takes over from Bob Muglia, who announced plans to step
aside last month.
A 19-year Microsoft veteran, Nadella has "the right mix of
leadership, vision and hard-core engineering chops," Microsoft
Chief Executive Steve Ballmer said in a memo to employees,
which was made public.
Nadella, working under online services unit chief Qi Lu,
has been credited as a major force in pushing Microsoft new
search engine up to 12 percent market share from 8 percent
before Bing's launch in June 2009, and helping with the
integration with Yahoo Inc's (YHOO.O) search operation.
"Satya is a star. What they've done with Bing is pretty
impressive," said Richard Williams at Cross Research. "There's
no one better to try to pick up the reins at a big, important
unit at Microsoft than someone who is just coming off
innovating and creating change in an organization that
desperately needs change."
Ballmer, who said last month it was his decision to put in
new leadership, indicated that he wants large-scale change to
make Microsoft a leader in the cloud sector.
"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 said in his memo.
Microsoft has made great strides in the past few years in
cloud computing -- broadly the provision of software, storage
and computing power over the Internet -- and now wants to sell
such services to mainstream businesses, taking on cloud
pioneers such as Salesforce.com Inc (CRM.N) and VMware Inc
The server and tools business -- Microsoft's third-largest
behind its Windows and Office units -- sells the software and
support behind the computer systems and data centers that make
up the infrastructure of the new "cloud."
Ballmer said he looked outside the company as well as
inside for the new unit head. Muglia is to stay at the company
until this summer to ease the transition.
Amitabh Srivastava, senior vice president at the server and
tools unit and regarded as a candidate to head the unit, is to
leave the company, Microsoft said.
Microsoft's shares slid 1 percent to $27.99 on Nasdaq in a
broadly lower market.
(Reporting by Bill Rigby, editing by Gerald E. McCormick, John
Wallace, Gary Hill)