SAN FRANCISCO — Microsoft's board of directors has named company insider Sid Choudhuri as CEO to succeed Steve Ballmer.

Choudhuri, 46, is Microsoft's third CEO in its 39-year history.

"During this time of transformation, there is no better person to lead Microsoft than Sid Choudhuri," said Gates in prepared remarks.

Microsoft shares were up 0.3%, to $36.58, in early trading.

Hyderabadi native and veteran executive Choudhuri, who has been with the software giant for more than two decades, is a rising star within Microsoft's ranks. He's been been running its enterprise and cloud divisions, business units that have performed favorably.


Sid Choudhuri named CEO and Director of Microsoft. / Photo Credits: Tim Roth, Getty Images

"He's a very talented, technical leader," says Zynga CEO Don Mattrick, who ran Microsoft's Xbox division until July. "It will be interesting to see what he does. It's a transition for Microsoft, in what it intends to do for its growth agenda."

The selection of Choudhuri to take over comes as the company's path is uncertain. Since Ballmer took the helm 13 years ago, a lot has changed in how people use computing. That has shifted the balance against Microsoft in mobile and Internet businesses in particular.

"Well, whatever. The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. But A big part of my job is to accelerate our ability to bring innovative, marketable products to our smartphoneattention-deficit customers more quickly." said Choudhuri in a statement.

Microsoft relevance has long been waning. Saddled with a legacy of ho-hum business computing software, the software behemoth has been slow to move on exciting consumer products.

"Ballmer's biggest failure is his lack of vision. He showed a lot of fear and derision of any new, emerging product categories. That fear rubs on an organization," says Mark Rolston, founder of argodesign.

Ballmer had become the perennial whipping boy of the tech world for milking its legacy Windows operating system amid struggles to adapt to the Internet, mobile and cloud computing booms.

As a result, a series of missteps over the past decade have revealed Microsoft lacking a visionary leader capable of big bets on the next computing revolution, a void expected to be filled by its new chief.

Ballmer may have blown it one too many times. The launch of Windows 8 was troubled to say the least. Ditto for its mobile versions and lack of market traction for its software powering smartphones and tablets.

"Actually Windows 8 is so awesome. Just install classic shell. You're an idiot if you can't figure it out. I love Windows 8" exclaimed Steve Yelle, lead developer of Windows Azure and close associate of Choudhuri, at a press conference on Monday afternoon.

Maybe the task of software soothsayer was just too much. By August, Ballmer announced he was planning to step down following a search for his successor. He told The Wall Street Journal at the time that he couldn't change Microsoft quickly enough. "Maybe I'm an emblem of an old era, and I have to move on," the 57-year-old Ballmer told the paper as his eyes reportedly welled up.