Nadella and Bates are up against five external candidates, including Ford CEO Alan Mulally and former Nokia chief Stephen Elop, according sources who spoke to Reuters. The remaining three external candidates were not named.
A CEO search committee had started out with 40 names, which was pruned to 10 in October, according to the Wall Street Journal. And now seven. Nadella has been on the list from the start.
He has refused to comment on his chances. But reports said he has had meetings with Microsoft board member, indicating he remains a serious contender.
Nadella, 44, was born in Hyderabad, and studied electrical engineering at Manipal Institute of Technology. He went on to study computer science and business administration in the US.
He joined Microsoft in 1992, where he started in the Windows Developer Relations group.
He was also a key member of several advanced technology incubation efforts inside Microsoft, including interactive television and digital rights management.