Updated from 3:24 p.m. EDT

SAN FRANCISCO -- Oracle ( ORCL) CEO Larry Ellison will let go control of fledgling software firm NetSuite when it goes public.

San Mateo, Calif.-based NetSuite said Ellison plans to put 639.3 million shares, or 60% of NetSuite, into a "lock box" that the company established for the purpose, according to a filing with the Securities and Exchange Commission on Tuesday.

The move will nullify Ellison's right to vote for board directors for as long as he remains a director or officer of Oracle. Ellison will still have the right to vote on changes of company ownership. Ellison owns 649 million shares, or 61% of NetSuite, and members of his family also own at least 13% of the company.

NetSuite, which was founded in 1998 by Ellison and Oracle alumnus Evan Goldberg, who is now NetSuite's chairman and chief technology officer, filed in July its intent to go public. The company has not disclosed the number or price range of shares to be issued. Credit Suisse is the lead underwriter on the deal.

NetSuite's CEO is Zach Nelson, who also worked at Oracle.

NetSuite sells on-demand enterprise resource planning and customer relationship management software. In CRM, it competes with Salesforce.com ( CRM), which also was founded by an ex-Oracle executive. Chairman and CEO Marc Benioff left Oracle in 1999 to start Salesforce and took that company public in 2004 at an offer price of $11 a share. Salesforce now has a market cap of $6.3 billion. The stock has risen 48% for the year, recently trading at $54.03.

NetSuite's revenue was up 68% year over year for the first six months of 2007 to $48.7 million.

Salesforce had sales of hosted software of $339 million for the first six months, up 52% year on year. That company swung to a profit of $4.5 million this year, or 4 cents a share.

NetSuite's loss was up 2.4% for the first six months, to $18.8 million, from a loss of $18.4 million for the same period of 2006, as the company has ramped up product development and marketing. The loss per share declined to 12 cents from a loss of 17 cents in the prior year.

NetSuite also lists as principle competitors in enterprise resource planning software Microsoft ( MSFT), SAP ( SAP), Intuit ( INTU), Sage Group and Epicor Software ( EPIC).

An interesting omission from the list of competitors is Oracle, which acquired an on-demand CRM suite with its purchase of Siebel in 2006.

SAP launched its on-demand CRM and ERP software suite to a limited number of customers in early October. Microsoft's Dynamics Live CRM is currently in beta and will be fully released in early 2008, according to that company.

Ellison recently criticized SAP's move into hosted, on-demand software as not cost effective for a company focused on selling integrated software packages to large enterprises. On-demand software is perceived as catering to small and medium-sized businesses, which Ellison said requires a separate sales force and unique selling strategy.