"Satya's got the right background to lead the company during this era," said Microsoft founder Bill Gates. "There's a challenge in mobile computing. There's an opportunity in the cloud. And the various business groups he's worked in-he's driven innovation, gotten architectures put together that really meet the needs of our customers."
Nadella was most recently executive vice president of Microsoft's cloud computing and enterprise division.
(Read more: Microsoft's new CEO: An insider and a 'cloud' man )
"It's a clear vote for remote and cloud computing as a major part of [Microsoft's] future" at a time when PC sales are lagging, said CNET Senior Editor Dan Ackerman.
"Windows 8 hasn't stopped a decline in PC sales, nor is it driving upgrades," he said.
Choosing a 22-year veteran of Microsoft may have been a safe bet, according to Engadget Managing Editor Dana Wollman, but the new chief has his work cut out for him.
"Nadella has never led a company before," she said. "He's an engineer by training, with some additional background in business. [Former CEO Steve] Ballmer was the opposite: a businessman who happened to work in the technology industry."
-By CNBC's Althea Chang