Ellison and the two new co-CEOs each stressed that nothing would change under the new management structure, with Ellison staying on as Executive Chairman and Chief Technology Officer.

But Oracle shares fell 2 percent to USD 40.70 in after- hours trading. The move immediately attracted criticism from management experts.

"In almost all cases, these co-CEO configurations are a jerry-rigged solution to a political problem," said Jeffrey Sonnenfeld, a professor at Yale School of Management.

The move comes earlier than expected by many investors, and appears designed to address concerns about the company's direction under Ellison, 70, who co-founded the database company that became Oracle in 1977 and has been Oracle's only CEO.

"While there was some speculation about Larry’s step-down, the timing is a bit of a head scratcher and the Street will have many questions," said Daniel Ives, an analyst at FBR Capital Markets. "Investors have a mixed view of Safra and especially Hurd as co-CEOs given the missteps we have seen from the company over the past few years."

On a conference call with analysts, Ellison said: "I'm going to continue doing what I've been doing over the last several years. They're going to continue what they've been doing over the last several years," referring to Hurd, 57, and Catz, 52.

"Mark and Safra have done a spectacular job and I think they deserve the recognition of their new titles." Catz and Hurd echoed that mantra on the call.         
"I want to make sure we are very, very clear. There will actually be no changes," said Catz. "No changes whatsoever."

For his part, Hurd stressed that Oracle was not hierarchical. "We're pretty flat in terms of the way we run the place, and we want to keep it that way," he told the conference call.

The creation of two CEO roles, which has largely been unsuccessful when tried at other companies, raises questions of how Catz and Hurd, both strong personalities, will work together at the top.
             
"Co-CEO structures are typically not ideal," said Bill Kreher, an analyst at Edward Jones. "They're both very independent thinkers who have strong wills. At times they won't agree. But they have worked closely together, and with Ellison.  We don't see the day-to-day changing."

The two have very different histories. Catz, trained in finance and law, was a Wall Street banker from 1986 until she joined Oracle in 1999, and has been a central figure in Oracle's many acquisitions.
           
Sales-oriented Hurd spent 25 years at computer and TM pioneer NCR Corp before joining Hewlett-Packard, where he was CEO from 2005 until 2010, when he resigned in the wake of sexual harassment claims by a female contractor. HP concluded that its harassment policy had not been violated but that Hurd had made inaccurate expense claims concealing entertainment for the contractor. He was courted by Ellison and joined Oracle later that year.

Under the new arrangement, manufacturing, finance and legal functions at Oracle will continue to report to Catz, while sales and service units will continue to report to Hurd. Software and hardware engineering will continue to report to Ellison.

The major difference is that Catz and Hurd will now report to Oracle's board, rather than to Ellison himself, although

Ellison is now Executive Chairman of that board.

Ellison will keep working full time, Oracle said in a statement. His step back from the top job mirrors Bill Gates at Microsoft, who stepped down as Chairman of the software giant Microsoft earlier this year but remains a board member and adviser to new CEO Satya Nadella.
         
Ellison has recently been edging back from his role as the face of Oracle. Last year, he skipped a quarterly conference call to be out on the water to watch his Oracle Team USA compete in sailing's America's Cup, and he also skipped his widely followed keynote speech at Oracle's OpenWorld conference as the regatta got down to its nail-biting final races.

But he promised to appear on the company's quarterly earnings calls with analysts. "You'll have to wait a little while longer before you get me off the calls," he told analysts on Thursday. "I apologize to everyone for that."

Marc Benioff, CEO of Oracle competitor Salesforce.com, commented on Twitter that Ellison will remain in power.

"There always has been, & always will be, one CEO at Oracle," Benioff tweeted in reaction to the news.