Interesting move and one that I have seen happen when you want to blame someone for future bad results.
Larry Ellison to Step Aside as Oracle CEO
Software Pioneer to Become Chairman; Mark Hurd and Safra Catz Named Co-CEOs
Larry Ellison, a college dropout who built Oracle Corp. into one of America's largest and most prominent technology companies, is stepping down as chief executive in a momentous Silicon Valley handover.
Mr. Ellison, 70 years old, a brash personality who engaged in public fights with rivals and gobbled up potential competitors, has been the only CEO at Oracle. He founded the company in 1977 and through his canny pulse on technology and acquisitions turned it into a dominant seller of business software.
Mark Hurd, 57, and Safra Catz, 52, two of Mr. Ellison's deputies, will take over as co-CEOs. The two have shared power as Oracle's co-presidents since 2010, when Mr. Ellison hired Mr. Hurd following his departure from Hewlett-Packard Co. after the board said it lost confidence in him.
Mr. Ellison has been among the last of the founder-CEOs of Silicon Valley's pioneering companies. Bill Gates turned over the CEO post at Microsoft Corp. more than a decade ago. Steve Jobs, the Apple Inc. co-founder, died in 2011 shortly after handing the company to a lieutenant. Hewlett-Packard's executive suite and boardroom no longer include family members of Bill Hewlett or David Packard.Oracle's Mark Hurd and Safra Catz are tapped as co-CEOs to replace founder Larry Ellison. What are the challenges for a company run by co-CEOs? WSJ's Shira Ovide explains. Photo: Getty
It is unclear how Oracle will fare long-term with Mr. Hurd and Ms. Catz at the helm. The duo effectively have run day-to-day operations at Oracle for several years with Mr. Ellison tending to focus on technology, a role he will continue to play. As executive chairman and the owner of a quarter of the company's shares, worth $48 billion, Mr. Ellison won't be walking away from its Redwood City, Calif., headquarters.
But Mr. Ellison's associates say he has demonstrated over the years a unique knack for both product-engineering details and business positioning that will be hard to replace. No one else at the company, they say, has the same combination of talents. "There always has been, [and] always will be, one CEO at Oracle," Marc Benioff, who left Oracle in the 1990s to start software firm Salesforce.com Inc., posted on Twitter.
His decision to step down as Oracle CEO comes at a delicate point for the company. Oracle has struggled recently with choppy sales as Mr. Ellison rewired the company's software to be accessed from remote computers and sold by subscription—part of the broad trend known as "cloud" technology.
Oracle shares fell 2.4% in after-hours trading after finishing up 41 cents at $41.55 in 4 p.m. New York trading. The company disclosed the executive changes and the quarterly results after 4 p.m. Eastern Time.
Mr. Ellison has thwarted many business rivals that threatened to knock the company off its perch over the years. He spent billions of dollars on technology deals and acquisitions to reshape what started as a database software company. Oracle acquired Sun Microsystems, developer of the Java programming language, customer relationship software maker Siebel Systems, and human resource management software maker PeopleSoft.In a sign of Oracle's difficulties, the company missed Wall Street's quarterly revenue estimate, delivering a 2.7% sales gain for the three months ended Aug. 31. Oracle has missed analyst revenue expectations for six of the last eight quarters. Earnings for its fiscal first quarter slipped less than 1% over a year earlier.
Publicly, he also derided rivals' products and executives with a sometimes-savage wit. After Mr. Hurd resigned from H-P after clashing with its board, Mr. Ellison famously called it the "worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago." In 2000, Mr. Ellison admitted to hiring private investigators to dig up dirt on Microsoft, calling it a "civic duty." The investigators found Microsoft helped fund companies that supported Microsoft in a battle with the Justice Department.
More recently, he has turned Oracle to focus on cloud software, another existential threat, vowing to make Oracle the biggest in the business.
"Larry stepping down speaks to Oracle needing new leadership at this point with a CEO that will help put fuel back in the growth engine," said Daniel Ives, an FBR Capital Markets analyst.
Mr. Hurd, regarded as a sales-strategy visionary, has been running Oracle's sales organization. Ms. Catz is Oracle's financial and operations whiz and a close ally of Mr. Ellison. People in the technology industry have anticipated the two wouldn't be able to share power forever, and now they have been thrust into an even more high-profile alliance.
Oracle said Mr. Ellison will continue with the company as executive chairman and chief technology officer. Jeff Henley, Oracle's chairman since 2004 and a former CFO, will take a post as vice chairman.
Oracle said manufacturing, finance, and legal functions will continue to report to Ms. Catz. All sales, service and vertical industry global business units will continue to report to Mr. Hurd. All software and hardware engineering functions will continue to report to Mr. Ellison.
"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," Mr. Ellison said in a statement. "Keeping this management team in place has always been a top priority of mine."
Mr. Ellison started college at the University of Illinois, and then attended the University of Chicago, but dropped out in the late 1960s to move to northern California. There, he tried his hand at the fledgling computer-programming industry.
In 1977, he started his own company with a few thousand dollars and a bold idea to topple International Business Machines Corp.'s stranglehold on corporate databases. Among his earliest and most important clients for his database software was the U.S. Central Intelligence Agency.
Oracle became successful beyond his wildest dreams, and the company became a launchpad to personal riches. Forbes ranks him as the fifth-richest person in the world. Mr. Ellison owns lavish homes around the world, recently purchased an island in Hawaii, and used his wealth to finance a champion America's Cup sailing team.