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Big news on Monday for Oracle followers: Founder, CEO and Chairman Larry Ellison gives up the chairman title and, for the first time since Ray Lane left, appoints a president. Not just one, but two!

Uninformed observers might assume that this is the first sign that Ellison, approaching 60, is about to step away completely. And who could blame him—he’s a world-class sailor, lives in an amazing Japanese palace in the Woodside hills and has left a strong legacy of Silicon Valley success.

But walking away—even near the top—isn’t the Ellison way. So what’s really going on? I spent some time with my Oracle insiders and uncovered the real truth. Here’s what happened, and why.

Jeff Henley:Oracle CFO Jeff Henley, beloved by Wall Street, was promoted to chairman of the board, replacing Ellison. Sure, this means Ellison’s stepping back a bit, but it’s really not that big of a deal. Henley wanted to spend more time with family, but investors were nervous about this adult influence leaving the company.

Ellison and Henley were already members of Oracle’s five-person board. Shifting the chairman title to the 58-year-old Henley lets Oracle keep Henley around, at the same time promoting him and cutting back his responsibilities. Henley won’t relinquish the CFO title until another is brought on—from outside the company. Wall Street’s happy, Ellison fobs off some of the less interesting parts of his job, and Henley gets an “attaboy” for a job well-done.

Safra Catz & Charles Phillips:These two are now co-presidents, reporting to Ellison, who remains CEO. Catz will continue to run global operations, while Phillips will run field operations, sales, marketing and consulting. Ellison hasn’t found anyone yet he can trust with the reins of Oracle, but in these two, he’s getting close. Katz has been a valuable lieutenant for the past five years, yet Phillips is a relative newcomer—joining Oracle from Morgan Stanley last May. Catz is already on the board, and now so too is Phillips.

Although this looks like a win for both execs, the move is fraught with peril. Very few co-president roles have been successful, and my take is this one will be a cat fight to the end. Look for one of the two to take over sole ownership of the presidency within a year.

What does it mean for Larry?

Larry Ellison:So what does it mean for Larry? Even though he owns more than a quarter of the company, he now appears to have a boss—in Henley—for the first time. But since Henley has been on the board, and the board members are still mostly loyal to Larry, that’s not such a big deal. This move is more about keeping Henley, Catz and Phillips happy than anything else.

But it also signals a shift for Ellison. Although it appears to be Ellison’s first step toward irrelevancy and retirement, my sources say that’s just not so. The programmer who built Oracle has realized—much as Bill Gates did a few years ago—that all that corporate stuff really isn’t much fun. The real challenge, for the technically savvy, is to continue to build “insanely great” products year after year (to borrow a phrase from Ellison pal Steve Jobs). Ellison hears the siren song of software development, and that’s what makes him really happy. Forget investor relations, HR policy, Sarbanes Oxley and the like. Larry’s earned the right to go back to the lab, and that’s just where he’ll be. It looks like, at least for the next few years, Larry will be just as engaged. But on building new products, combating open source and expanding the technology—instead of focusing on 10-Qs, the SEC and California’s Office of IT.

Losers:Along with Henley, Phillips and Katz, Oracle has two other key senior VPs: Sergio Giacoletto, who runs Europe, Middle East and Africa; and Keith Block, who runs North American sales and consulting. With Phillips leapfrogging the two—gaining the co-presidency and jumping onto the board—my reading of the tea leaves indicates that these two execs have fallen out of favor. Whether it’s a minor dust-up or if both will be leaving Oracle shortly remains to be seen.

In the end, this is about three things. First, it shows that Larry’s gotten over the wrenching breakup with Ray Lane and is finally ready to trust someone else in the presidential role. But by selecting two co-presidents it’s clear he’s just dating and not ready to commit.

Secondly, Oracle had to figure out some way to keep Henley on—he’s the one guy Wall Street can really trust, and has since 1991. Chairman of the board is perfect, with a reduced schedule, yet vast influence.

And lastly, it does appear Larry’s giving up control—in the same way Gates turned Microsoft’s reins over to Steve Ballmer. At 59, he’s finally starting to feel comfortable with his role as a technologist. And for Oracle, that’s a good thing. With Larry as chief architect, and a strong supporting cast of business leaders around him, Oracle might just beat back its newest set of challengers—including worldwide leaders like SAP, and upstarts like OpenSQL and PostgreSQL too.