Microsoft Corporation is expected to assign its cloud-computing head, Satya Nadella, as its next chief executive, a source familiar with the subject said on Thursday, as the board finishes off a five-month search for a tech-savvy heavy-hitter to lead the world's major software company. As part of the shift co-founder Bill Gates may step away as chairman and be replaced by escort independent director John Thompson, said the source, speaking on situation of ambiguity because the process is secret. Gates would stay as a director, the source added. Rising star Nadella, a resident of Hyderabad - where Microsoft has its biggest non-U.S. research center - was encouraged to run the company's fast-expanding cloud, or internet-based, computing initiatives in July last year as part of current CEO Steve Ballmer's fundamental re-organization of the company. The selection of this Microsoft veteran would make him the most powerful Indian-born tech executive in the world and set him beside PepsiCo Inc's chief, Indra Nooyi, as the leader of a renowned, large-cap U.S. Corporation. Born in 1967 and educated in India and the United States, Nadella's tech career begun at internet software pioneer Sun Microsystems. He connected with Microsoft in 1992 and rapidly climbed the corporate steps with leading roles in the Office and Bing search-engine teams. He was encouraged to run the company's server and tools unit in 2011. That unit now forms the backbone of Microsoft's cloud-computing platform, which Nadella runs under his official title of executive vice president, cloud and enterprise. "He's a rock-hard choice," offering permanence of strategy and proven execution, said Sid Parakh, an analyst at fund firm McAdams Wright Ragen. If Nadella is titled CEO, it is possible Thompson will help out on the vital task of managing Microsoft's relations with its powerful Wall Street investors, the source said. Nadella has small experience of that aspect of the job, and Ballmer and Gates did not prioritize it. Gates would possibly focus on technical improvement in any new role, the source said. There have been calls for months for Gates to bow out from investors who consider Microsoft's co-founder is a wedge to radical transform and investor-friendly moves.