Yesterday, Microsoft announced that their search for a new CEO is over, and that they have tapped company insider Satya Nadella to lead the company. Nadella is taking over as CEO since his predecessor, Steve Ballmer, retired from the position back in August.

Nadella is a great choice to lead Microsoft. He is man who knows the company inside and out due to him working at the company for more than 20 years. Right now, Microsoft needs a leader like Nadella to help transform the company into a real competitor to Google, which is slowly trying to take Microsoft on their home turf: the desktop.

Apple is not Microsoft’s main competitor anymore, it’s Google. Google is a threat large enough for both Apple and Microsoft to start sharing patents and having a great relationship.

Right now, Microsoft is trying to convert from being a services-only company to a more Apple-like hardware and services company. This conversion started two years ago when Microsoft announced the Surface, a tablet computer. Microsoft is continuing this with their recent purchase of Nokia, which will eventually birth an in-house Microsoft phone.

Nadella has already said that “Our industry does not respect tradition– it only respects innovation.” Nadella seems to know that Microsoft must continue to innovate. He has said that he wants to “zero in” on where Microsoft can continue to innovate.

While the news that Nadella is exciting, so is the news that Microsoft founder Bill Gates will be taking on a large role in helping create new products. However, his new, expanded role is great, but it came at a cost; Gates decided to resign as chairman of the board with the CEO of Virtual Instruments John Thompson taking over as chair.

With Gates taking a larger role in developing new devices for the company and Nadella’s leadership, Microsoft will be able to innovate even more than some of their competitors, and could even become a force to be reckoned with like Apple. Nadella may even have what it takes to become the next Steve Jobs.