Microsoft is close to appointing a replacement for long-time CEO Steve Ballmer and may even be considering ousting co-founder Bill Gates as chairman, according to reports.

The man tipped to take over from Ballmer is Satya Nadella, head of the company's cloud computing division and enterprise business, which deals with corporate clients. Citing "people briefed on the process" on Thursday night Bloomberg said Microsoft's board is also considering replacing Gates as its chairman. An announcement could come as early as next week.

The company was not immediately available for comment.

Gates and Ballmer have led Microsoft since its founding 39-years-ago. In recent years the company has been left looking flat-footed by rivals Apple, Google and Facebook. Ballmer said he would step down last August and the company has since been conducting an extensive search.

Nadella, 47, joined Microsoft in 1992 and has had leadership roles in cloud services, server software, internet search and business applications. He was born in Hyderabad, India and holds a master of science degree in computer science from the University of Wisconsin and a master in business administration from the University of Chicago.

Last year Manipal Institute of Technology director Vinod V Thomas, who taught Satya 25 years ago, told The Times of India: "I cannot vividly recall him as he didn't figure in either ends of the spectrum. Records show he was a first-class student who achieved distinction."

While he is largely unknown outside the company, Nadella runs one of Microsoft's fastest growing divisions. Microsoft's commercial cloud services grew revenue by 107% from a year ago, the company said when it reported its fiscal second-quarter results on 23 January.

Microsoft's lead independent director John Thompson, who is heading the CEO search, wrote in a blog post last month that the board planned to complete a search for CEO in the "early part of 2014."

Ford CEO Alan Mulally was once seen as a frontrunner for the Microsoft job. But Mulallly said in January that he was not joining the software giant. Former Nokia CEO Stephen Elop, now vice president of Microsoft's devices and services business, has also been seen as a contender.