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Last updateFri, 13 Mar 2015 4pm

#VIDEO: Satya Nadella - The world's MOST POWERFUL INDIAN TECHIE

Microsoft on Wednesday announced that Satya Nadella will become CEO of the tech giant, confirming what many experts have predicted.

Mr Nadella has spent 22 years at Microsoft, and was previously the Company's Executive Vice President of Cloud and Enterprise. Nadella also takes a position on Microsoft’s Board of Directors.

Nadella is credited as a key leader in moving the company towards cloud services, around products including Bing, Xbox and Microsoft Office. His time at MS oversaw a period of huge growth for Microsoft Business Services, too, growing that segment of the business from a $1.5 billion slice of pie to a $5 billion segment in just five years’ time.

In an email to Microsoft Employees Nadella spoke about his time at the Seattle-based firm and how he asked Gates to come back and spend more time at the company. He points out the importance of innovation to Microsoft, and puts forward both mobile and cloud as key priorities going forward.

The appointment of Nadella could signal a doubling down on its Server and Tools business, which is now a $19 billion piece of Microsoft’s overall revenue picture.

Nadella is only the third person to occupy Microsoft’s CEO role in 39 years, preceded by Steve Ballmer who filled the role between January 2000 and January 2014 and Gates, who led the company between 1975 and 2000.

Nadella was selected after a five-month selection race and one of his conditions was reportedly asking Gates to take a more active role in developing new technologies.

It is not clear why Nadella might want a role change for Gates. The presence of Gates and current CEO Steve Ballmer on the board has deterred some external candidates who feared they would meet resistance if they want to make fundamental changes, sources have told Reuters over the past few months.

The appointment of Hyderabad native Nadella makes him arguably the most powerful Indian-born tech executive in the world.

Nadella joined Microsoft in 1992 from Sun Microsoystems, according to the company. He earned a bachelor’s degree in electrical engineering from Mangalore University, a master’s degree in computer science from the University of Wisconsin — Milwaukee and an MBA from the University of Chicago.

Now Nadella faces a stark set of challenges. Microsoft has struggled to keep up with Apple and Google in the booming mobile market.

Despite pouring billions of dollars into mobile software and gadgets, the company has not been able to find a formula to compete successfully with its main competitors in the devices market.

Last fall, Microsoft announced a $7.2 billion deal to buy Nokia’s mobile phone business.

Nadella faces an uphill battle in the sector. Microsoft’s mobile software accounts for a just 3.6% of the market, compared to 81% for Google’s Android platform and 12.9% for Apple’s iOS, according to research firm IDC.

Nokia is nowhere to be found on IDC’s list of the top global smart phone manufacturers, which is dominated by Samsung and Apple.

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