SAN FRANCISCO (KCBS)— Microsoft has named a successor to retiring CEO Steve Ballmer. Satya Nadella becomes only the third chief executive in the company’s nearly 40-year history.

The company also announced that founder Bill Gates will be stepping down as chairman moving into the role of technology advisor. Nadella, 46, has been with Microsoft 22 years and has an engineering degree as well as an MBA.

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He’s really worked in the business side of the company. He started on the server side of the company and he’s been in business applications having also worked on the advertising and search area. For the last three years he’s been the head of cloud and enterprise.

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There were a lot of rumors that Microsoft was going to bring in the CEO of Ford, but Nadella is an in-house candidate. This is a company that tends to recruit from within.

I think it’s a move that reinforces the business side of the equation. Even though they have a lot of consumer products like Xbox, consumer PCs, tablets, etc.; it’s fundamentally a company that serves enterprise businesses and organizations. Nadella really is ideally suited for the role.

Another big change is Bill Gates’ announcement that his future role with the company is as technology advisor. I’m not sure what that means, but on the technology side, Gates is brilliant.

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Most of his energy has been spent on the Bill & Melinda Gates Foundation, trying to eradicate disease and to change education.