UPDATE 3-NetSuite says Ellison to limit his influence

(Recasts, adds analyst comments, background, bylines.)

By Jim Finkle and Lilla Zuill

BOSTON/NEW YORK, Oct 30 (Reuters) - NetSuite Inc, a software maker controlled by Oracle Corp (ORCL.O) founder Larry Ellison that has filed to go public, said on Tuesday that Ellison has agreed to reduce his influence at the company.

The move addresses concerns that shareholders who invest in the initial public offering would not have had much say in how the company is run, given Ellison's large stake in NetSuite.

Ellison will cede his voting rights and transfer his entire NetSuite stake, about 61 percent of outstanding shares, into a "lockbox" company to be administered by a third party, NetSuite said in a filing with the Securities and Exchange Commission.

His children will still hold 13 percent of voting shares in NetSuite, which works in the rapidly growing market for business software accessed over the Web.

Some analysts said concerns about Ellison's control had held up the company's plan to go public, which it first disclosed on July 2. They said Ellison's relationship with the two companies would be particularly sensitive if Oracle, the world's third-largest software maker, were to ever seek to acquire NetSuite.

"This tack that Larry Ellison has chosen is a rather astute way of circumventing issues that would have dominated roadshows and clouded the offering," said Scott Sweet, managing director of research firm IPOboutique.com.

NetSuite spokeswoman Brooke Hammerling declined to comment on Ellison's stock move. Officials with Oracle could not be reached.

Oracle, is the biggest maker of database software, and is aggressively looking to boost its share of the market for business management programs. Such software helps manage tasks such as accounting, payroll, inventory control, shipping and manufacturing.

So far Oracle has focused on selling software to large corporations, but analysts say that one day it might look to target smaller businesses. If that were to happen, they say, a conflict could arise if Oracle were to seek to acquire NetSuite, whose products target smaller companies.

Also, NetSuite has previously referred to Oracle as "a potential competitor."

Under the provisions disclosed in Tuesday's filing, the manager of the trust that will hold Ellison's stake will only be able to sell shares under a limited set of circumstances, primarily to donate them to charities.

He will transfer his 61 percent stake, held by affiliate Tako Ventures, into the lockbox company and will lose the ability to appoint directors to the company's board after NetSuite's IPO.

Voting restrictions imposed on Ellison's stake, including not having the right to appoint NetSuite directors, would end if Ellison stepped down from both his officer and director positions at Oracle, NetSuite said in the filing.

Philip Simon, an officer of Ellison-controlled Tako Ventures, also resigned from his position on NetSuite's board, the company added in its filing.