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In 1977, Larry Ellison started the company that’s now called Oracle with an investment of $1,200 and two partners. As of today, the day he announced his intention to relinquish the title of CEO he has held for 37 years, it was worth $185 billion.
As the world digested the announcement, there were two significant questions, both surprisingly easy to answer.
The first is what will change at Oracle, now that presidents Mark Hurd and Safra Catz have been promoted to the position of dual CEOs. Catz answered that question on a conference call rather simply: “There will be no changes whatsoever.”
Indeed, the arrangement essentially formalizes the working relationship that has evolved at Oracle since Hurd joined as president in 2010. Ellison will continue as CTO and chairman of the board. Hurd will continue as he has, running Oracle’s sales and service operations as well as its business units devoted to selling specialized products to individual industries, or what the company calls its “vertical industry” units.
Catz, who to now has been both president and CFO, will run the finance and legal operations (she has both business and law degrees from the University of Pennsylvania) and will also oversee manufacturing operations.
Ellison will be CTO, devoting his attention to working with Oracle’s software and hardware engineering teams. Asked during a conference call for his reason for relinquishing the CEO title, his answer was simple: “Mark and Safra have both done spectacular jobs. … I am going to continue doing what I have the last several years. They deserve the recognition, they deserve the CEO title.”
Which leads us to the second and more complicated question, which is “Why now?” Since nothing is changing at Oracle in the operational sense, the answer has nothing to do with fresh eyes or new thinking about the challenges that Oracle faces.
One possible motivation is Ellison’s age: He turned 70 last month, and as much as he might protest in jest to the contrary, he isn’t getting any younger. Another motivation may simply be the one he shared on the conference call: The wish to reward Catz and Hurd and fully solidify their commitments to Oracle over the longer term.
Hurd in particular has occasionally been mentioned as a candidate for jobs outside of Oracle. During the campaign by Michael Dell to take his computer company private last year, the investment firm Blackstone, contemplating a fight for control, briefly floated Hurd’s name as a possible CEO. Hurd wasn’t interested, not even a bit, but the mere mention of his name briefly caused Oracle shares to swoon.
But there’s still no doubt where the power lies at Oracle. As of Dec. 31, Ellison controlled more than 1.1 billion Oracle shares, amounting to about 25 percent of the company, more than its 15 next largest shareholders combined. That stake is worth about $46 billion, making Ellison the seventh-richest person in the world according to Bloomberg.
As Dennis Berman of the Wall Street Journal tweeted earlier today, since Oracle shares debuted for trading in 1986, they have risen in value by an astonishing 89,640 percent as of today’s closing price. Even for Silicon Valley, accustomed as it is to large numbers and hyberbolic adjectives, it has been an epic run.
This article originally appeared on Recode.net.
