Jon Swartz, Matt Krantz and Brett Molina

USA TODAY

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, co-presidents 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."

Shares of Oracle were down about 2% 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 USA'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.

'PINEAPPLES ON LANAI'

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% 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% 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 start-ups.

MORE MERGERS?

"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 sw & hw engineering functions will continue to report to @larryellison" tweeted Salesforce.com CEO Marc Benioff, a former Oracle executive.

Swartz reported from San Francisco, Krantz from Los Angeles and Molina from Tyson's Corner, Va.

Contributing: Jessica Guynn.