Another high-stakes project that's in the works — and many say overdue — is the delivery of a native, full-featured version of Office for the iPad and for Android tablets. It's a move some say Microsoft has been reticent to make for fear of hurting its Windows business.
Perhaps as important, Nadella will need to recognize new market shifts and lead the company to pounce on those opportunities early. Ballmer was faulted for failing to grasp the revolution that has made tablets and smartphones must-have devices. Earlier, under his watch, Microsoft failed to see the opportunity in online search that made Google a global titan, and the social networking craze that Facebook and Twitter seized upon.
Ballmer was also criticized for what some see as his slow reaction to enterprise cloud computing, although Microsoft has now recovered lost ground with products like Azure and Office 365.
Nadella inherits the ongoing restructuring of the company's operations, which was Ballmer's brainchild. That plan, called One Microsoft, is designed to make the company function more cohesively. However, some say an opposite approach is needed: to make its various business units more autonomous, because its product line has become so diverse, encompassing the Xbox and the enterprise SQL Server database.
Ballmer and the board are convinced that the One Microsoft reorganization will make the company more efficient and innovative, and ultimately a stronger competitor to Apple, Oracle, IBM and Google.
The reorganization dissolved the company's five business units — the Business Division, which housed Office; Server & Tools, which included SQL Server and System Center; the Windows Division; Online Services, including Bing; and Entertainment and Devices, whose main product was the Xbox.
Those units were replaced by four engineering groups organized by function, around OSes, applications, cloud computing and devices, and by centralized groups for marketing, business development, strategy and research, finance, human resources, legal and operations.
The new CEO will have to see that reorganization through, since the board has said it supports the plan and will not scrap it.
Ballmer, who is 57 and joined Microsoft in 1980, had been CEO since 2000, when he replaced Gates.
Sign up for CIO Asia eNewsletters.