Ellison drops CEO post, becomes Oracle executive chair and CTO

One of the most colourful people in the U.S. tech sector — or any country’s tech sector — is stepping upstairs. Sort of.

Oracle founder and CEO Larry Ellison suddenly announced Thursday that the 70 year-old has become the database giant’s executive chair and chief technology officer. In the latter capacity, though all software and hardware engineering functions will report to him.

Meanwhile the day-to day running of the rest of the company is now in the hands of  Safra Catz and Mark Hurd,, who will share the position of CEO.

All manufacturing, finance, and legal functions will continue to report Catz. Sales, service and vertical industry global business units will continue to report to Hurd. Jeff Henley, who had been chair for the last decade, was appointed vice-chair.

In an email industry analyst Rob Enderle said Ellison “found a creative way to have his cake and eat it too.  As CTO, which is a non-line non-executive roll, they don’t have to report the salary and that salary is set by the folks that still report to Larry as executive chairman.  A board member doesn’t have to report the other salaries (publically) he makes (many are CEOs) and the executive chairman has the ultimate authority in a public company.  In effect Larry remains on top, the board no longer controls his salary and he no longer has to report it.”

Analyst Zeus Kerravala of ZK Research said that one has to look at Ellison’s tenure at Oracle as one of the most successful in the history of the tech sector considering how the company has grown. Ellison is taking a product role, he noted, which is what Bill Gates did when he became CTO at Microsoft.

In some ways this looks like a succession plan for Catz and Hurd, with them fighting for the board’s attention on who should be the full CEO. “Larry’s got such a strong reputation in the company will be still able to over-rule the co-CEOs because of his standing. He’s almost a celebrity there. Having him stay could create difficult some challenges for the co-CEOs if there’s a difference of opinion on the direction of the company. Whether it will be successful will depend on whether Ellison is willing to take a back-seat role and let the others run the company.”

On the other hand, he doesn’t have much positive to say about having two CEOs. Research in Motion (before it became BlackBerry) tried it, Kerravala pointed out, “and it was never a great situation.”

In a statement Ellison noted that Catz and Hurd will now report to the Oracle board rather than to him. “All the other reporting relationships will remain unchanged. The three of us have been working well together for the last several years, and we plan to continue working together for the foreseeable future. Keeping this management team in place has always been a top priority of mine.”

“Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy,” said board’s presiding director Michael Boskin. “Safra and Mark are exceptional executives who have repeatedly demonstrated their ability to lead, manage and grow the company. The directors are thrilled that the best senior executive team in the industry will continue to move the company forward into a bright future.”

The announcement comes on the same day as Oracle released its first quarter financials. Net income was US$2.2 billion on revenues — which were up three per cent for the three month period — of US$8.6 billion.

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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