As expected, Microsoft (MSFT) today played the three key pieces in its grand plan, naming 22-year company veteran Satya Nadella as the third chief executive in its 38-year history, shifting board director John Thompson to chairman and sliding Bill Gates to technology advisor.

Microsoft credited Nadella, formerly the company’s Cloud and Enterprise group executive vice president, with leading “major strategy and technical shifts across the company’s portfolio of products and services,” heading its move to the cloud and shepherding significant growth in the vendor’s Server and Tools Business to some $20 billion annually.

In an email to employees, Nadella made it clear where he intends to take the company: “Our industry does not respect tradition—it only respects innovation. This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places—as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.”

Gates takes the new title of Founder and Technology Advisor, and will focus on the company’s technology and product direction and serve as Nadella’s advisor, a function the new chief reportedly requested as a condition to take the job.

“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Gates, in a statement. “Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth.”

Outgoing boss Steve Ballmer, who retains a board seat in the shuffle, wrote in an email to employees posted on the vendor’s website: “Satya is a proven leader. He’s got strong technical skills and great business insights. He has a remarkable ability to see what's going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way.”

Thompson, the former Symantec (SYMC) chief and IBM (IBM) top executive, who’s held a seat on Microsoft’s board for two years, was said to be reluctant to take the chairman’s slot. But some viewed the move as important to the company’s establishing new leadership under Nadella’s command.

“Satya is clearly the best person to lead Microsoft, and he has the unanimous support of our board,” Thompson said. “The board took the thoughtful approach that our shareholders, customers, partners and employees expected and deserved.”

Ballmer, who has presided over Microsoft since 2000, takes with him a long legacy easily recognizable by a boisterous, unmistakable passion that framed the company’s take-no-prisoners culture. Nadella is said to be a far different personality and it will be interesting to see if his reputation for presenting a calm, considerate and collaborative approach prevails in remodeling the company’s long-entrenched persona.

The knock on Nadella is that he’s never run a company of Microsoft’s size, depth and breadth and it is here where Microsoft may miss Ballmer’s business sense. That Nadella will have Gates nearby to advise him will help, but whether that makes up for his lack of experience in this area remains an open question.