Oracle CEO Larry Ellison steps down

By: Jon Swartz Matt Krantz Brett Molina Published on Fri Sep 19 2014

SAN FRANCISCO—Larry Ellison announced Thursday he has agreed to step down as CEO of Oracle, the software powerhouse he co-founded.

Mark Hurd and Safra Catz, copresidents of Oracle, will take the role as CEO. Catz will handle all manufacturing, finance and legal functions at the company, while Hurd manages “sales, service and vertical global business units.”

Ellison, 70, founded the database giant in 1977 and has turned the company into the king of high-end business-focused software. He will remain with the company as the board’s chairman and chief technology officer.

The concept of appointing two CEOs is not unusual. Software giant SAP operated under a two-CEO structure until Bill McDermott assumed the position solely in May. “It worked relatively well for a few years,” says Gartner analyst Chad Eschinger, adding Oracle co-CEOs Hurd and Catz are “two very capable executives.”

Ellison, a high-tech legend who oversaw one of the most charismatic and profitable runs for a leader in business history, announced his departure via a terse press release Thursday afternoon.

“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,” Ellison said. “Keeping this management team in place has always been a top priority of mine.”

TORU YAMANAKA / AFP/GETTY IMAGES

Larry Ellison, CEO of Oracle Corporation, stepped down Thursday as chief executive of Oracle, handing off the helm of the successful technology company he co-founded in 1977, the company announced. Ellison, who recently turned 70, will be replaced as CEO by in-house executives Safra Catz and Mark Hurd.

Shares of Oracle were down about 2 per cent in after-hours trading.

The new assignment for Ellison, the world’s fifth-richest man and an avid sailor, signals a continuation of a major changing of the guard at one of the U.S.A.’s most powerful technology companies. Some of the top tech companies, including Microsoft, Apple and now Oracle, have CEOs who were not founders.

Ellison, who was best friends with Apple co-founder Steve Jobs, guided Oracle through nearly four decades of ups and downs and almost single-handedly created the world’s largest database company. The company’s products are a staple of modern commerce and industry.

Ellison’s personal ambition and appetites are as outsized as his company. He recently sponsored the team that won the America’s Cup, oversaw construction of a majestic Japanese-themed home in Silicon Valley and gobbled up large swaths of land in Hawaii, including the island of Lanai. He also proudly boasts a private jet, luxurious yacht and fast cars.

“He has been at the helm for 37 years. It is the end of an era,” JMP Securities analyst Patrick Walravens says. “Malibu, pineapples on Lanai and the America’s Cup should all benefit as he spends more time on them.”

Ellison remains the single-largest owner of Oracle stock ORCL. He owns 1.1 billion shares. They account for 25 per cent of the shares outstanding and are valued at $45.8 billion, according to S&P Capital IQ. The second-largest owner of Oracle is financial management firm BlackRock, with just a 4.2 per cent stake of shares outstanding.

Some analysts argue the mercurial Ellison’s exit comes at a time when he seemed distracted by outside interests and Oracle faced competition from a raft of large companies and startups.

“Larry is leaving Oracle at an interesting juncture, as the company is struggling with growth, and it appears the new product cycle is still a few quarters away from significantly helping the top-line,” says Daniel Ives, an analyst at FBR Capital Markets. “In our opinion, the company needs (mergers and acquisition) pronto to bulk up its product footprint and get growth back in the Oracle story.”

Edward Jones analyst Bill Kreher says while replacing Ellison will be challenging for Oracle, he expects a “smooth and orderly” transition in leadership. “Oracle’s leadership positioning in key software markets and aggressive acquisition strategy should allow for renewed revenue momentum as its cloud offerings gain further traction,” he says.

For many, Ellison will be as singular to Oracle as the late Jobs was to Apple.

“There always has been, & always will be, one CEO at Oracle. All saw & hw engineering functions will continue to report to @larryellison” tweeted Salesforce.com CEO Marc Benioff, a former Oracle executive.

Court sides with Oracle over Android in Java patent appeal

• by Seth Rosenblatt 
   @sethr
 



The long, winding journey of the legal dispute between Google and Oracle over whether Android's use of Java components constitutes fair use has taken another twist, as the federal appeals court on Friday overruled a lower court decision in favor of Google.

The US Court of Appeals decision (PDF) -- heard by a three-judge panel in Washington, DC, and written by Judge Kathleen O'Malley -- determined that District Judge William Alsup erred when ruling in favor of Google that APIs, which allow different software components to communicate with each other, were not copyrightable.

"...[W]e conclude that the declaring code and the structure, sequence, and organization of the API packages are entitled to copyright protection," O'Malley wrote. In reversing the district court's decision, the appeals court instructed the lower court to reinstate the jury's infringement finding for 37 Java application programming interface packages.

"The Federal Circuit's opinion is a win for Oracle and the entire software industry that relies on copyright protection to fuel innovation and ensure that developers are rewarded for their breakthroughs," said Dorian Daley, general counsel for Oracle. "We are confident that the district court will appropriately apply the fair use doctrine on remand, which is not intended to protect naked commercial exploitation of copyrighted material."

Google's official reaction was to sound a clarion call of concern.

The implications of the decision are huge, said independent patent and copyright law analyst Florian Mueller at his blog Foss Patents. The case will return to the District Court for Northern California for a new trial on fair use and to determine damages."We're disappointed by this ruling, which sets a damaging precedent for computer science and software development, and are considering our options," Google said in a statement.

"The question in a copyright case is, however, not whether the copyist had choices. It's whether the creator of the copied material had options," Mueller said. "And Sun's engineers (Java was developed by Sun, which was acquired by Oracle in 2010) had plenty of choices. The Java APIs were and are creative and original. And that's why they are protected."

James Grimmelmann, a copyright law professor at the University of Maryland in Baltimore, disagreed and echoed Google's call for concern.

"We had one of the most technically accurate opinions replaced by an opinion that doesn't really understand what an API is," he said.

"I think it's going to have a very chilling effect," Grimmelmann said. "It says that, among other things, that if you build an app for one platform, and the platform owner rescinds access, you face copyright risks if you move the app to a different platform."

The appeals court decision is the latest chapter in the lengthy patent and copyright battle that began when Oracle sued Google in 2010, alleging patent and copyright infringement over the use of Java APIs in the mobile operating system.

While the case goes back to trial to determine whether Google's use of Java APIs in Android is covered by fair use, and to calculate possible damages it owes to Oracle, Google's opportunities for recourse are few. Google can appeal to have the case re-heard by the entire federal appeals court bench, as opposed to just the three-judge panel that delivered today's ruling, or it can appeal to the US Supreme Court.

Neither appeal is guaranteed to be granted, said Grimmelmann, although the Supreme Court might be more likely because of its interest in resolving the conflict of opinion between two lower courts.