Microsoft Corp named veteran insider and expert engineer Satya Nadella as the head of its $15 billion server and tools business, as it looks to revitalize its push into cloud computing.

Nadella, 43, most recently led engineering efforts for Microsoft's online services business, which includes the search engine Bing and Internet portal MSN.

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.

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.

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 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 -- regarded as a candidate for the top job -- is to leave the company, Microsoft said.

Microsoft's shares slid 0.7 percent to $28.09 on Nasdaq in a broadly lower market.

(Reporting by Bill Rigby, editing by Gerald E. McCormick, John Wallace)

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