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Ellison steps down as chief executive of Oracle


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SAN FRANCISCO >> Silicon Valley just got a little less colorful.

Larry Ellison announced Thursday his retirement as chief executive of Oracle, a company he founded in 1977 that has transformed the way businesses use technology and made him one of the world’s richest people.

His departure, effective immediately, is one of the last exits of the tech industry’s first generation of celebrity executives, who took computers out of the back offices of a few big institutions and into everyday life.

"By a lot of definitions, it’s the end of an era," said Zach Nelson, chief executive of NetSuite, who worked at Oracle from 1992 to 1996. "He is the longest-tenured founder and CEO in the Valley."

Ellison is the largest investor in NetSuite, a company that uses so-called cloud computing technology to manage things like retailing.

Ellison will become Oracle’s executive chairman and will continue to work on Oracle’s technology as its chief technology officer, the company said in a statement. The current chairman, Jeffrey Henley, will become vice chairman. The chief executive job will be shared by Mark Hurd, now co-president, and Safra Catz, co-president and chief financial officer.

Along with Bill Gates at Microsoft and Andy Grove at Intel, Ellison was one of the most important — and flamboyant — figures of tech’s early boom years.

His personal fortune, estimated by Bloomberg at about $46 billion, has helped Ellison become one of the technology industry’s most recognizable people. He has been married four times, and in 2013 his sailboat racing team, Oracle Team USA, won the America’s Cup for the second time in San Francisco.

A licensed pilot and a collector of exotic aircraft, he lives on an estate in Woodside, Calif., valued at more than $100 million and maintains several other properties, as well as a yacht nearly the length of a football field. In Hawaii he bought the 141-square-mile island of Lanai in 2012 for a reported $300 million and is turning the land into a technology-infused sustainable community. In 2013 he also purchased local commuter airline Island Air for an undisclosed price.

Despite all this, Ellison does not seem ready to leave Oracle. The executive, who turned 70 last month, said during a conference call with financial analysts that he would "continue doing what I’ve been doing for the past several years," including overseeing Oracle’s technology development, making final decisions on corporate matters and even appearing on quarterly earnings calls.

The two executives who are replacing him, Ellison said, "deserved the recognition."

Oracle’s software and hardware are involved with the ways that companies and large organizations store and manage their data, as well as sophisticated applications for running things like international manufacturing and corporate financial systems.

It is unusual for big technology companies to split responsibilities at the top, but so far the two co-presidents have split much of running Oracle, a company with more than 120,000 employees that is based in Redwood Shores, Calif. Hurd runs service and sales, while Catz oversees operations and finance.

Still, neither has Ellison’s technological expertise, nor is either likely to cast anything like the shadow that Ellison has during his 37-year career.

Born to an unwed mother in New York, Ellison was adopted by his aunt and uncle and grew up in a Jewish household in Chicago. He is known for a fascination with Japanese samurai culture.

He attended college but did not graduate, and he took a job in the computer business.

An early project involved writing for the CIA a database that could turn numbers into information. The idea, pioneered by IBM, was to relate one set of data to another, for example, a row of people’s names with a column of their birth dates. This, in turn, could be combined in a table of, say, all people born under the astrological sign Leo.

In 1977, working with Robert Miner and Edward Oates, Ellison created a company called Software Development Laboratories to sell their product, the relational database, to the government. Finishing the project ahead of schedule, they turned their database into software for businesses. After a second name change, the company became Oracle in 1982.

Ellison proved to be a master salesman as well as an able technologist with a good eye for managing talent, and Oracle became a dominant maker of software for businesses.

He was also adept at changing Oracle with the technological times. The company was born in an era when mainframe computers were giving way to minicomputers, and it managed to dominate business computing through the rise of personal computers, computer servers and the Internet.

Once a foe of growth through acquisitions, over the past several years Ellison has spent billions getting Oracle into cloud computing, considered the next wave in technology.

Some analysts said Ellison’s passion for the business would keep him busy at Oracle, despite the nominal changes.

"He’s going to have Oracle’s CEOs reporting to him. He’ll have product reporting to him, and product is what it’s all about," said Bill Hostmann, a research analyst at Gartner. "He gets himself out of day-to-day operations, but is it really that different?"

Whatever the changes mean for Ellison, they are certainly a victory of sorts for Co-president Hurd, the former chief executive of Hewlett-Packard who resigned in 2010 after a sexual harassment investigation. HP concluded that Hurd had not violated its sexual harassment policy, but the executive and the HP board were at odds over other matters of conduct.

At the time, Ellison castigated the HP board, and he was quick to hire Hurd, who has moved to strengthen Oracle’s ties to big business.

On Thursday, Oracle reported first-quarter revenue of $8.6 billion and net income of $2.2 billion, or 48 cents a share. In its previous fiscal year, the company had total revenue of $38 billion and net income of almost $11 billion.

Using nonstandard accounting, analysts had expected earnings per share to be 64 cents, according to a survey by Thomson Reuters. By that accounting, Oracle had earnings of 62 cents a share, missing expectations by 2 cents.

Shares of Oracle declined about 2 percent in after-hours trading.

By Quentin Hardy, New York Times

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