Leveraging its hugely successful Exadata engineered systems franchise, Oracle jumped unconditionally into the cloud computing business Sunday night with a new hardware-software middleware machine that CEO Larry Ellison billed as the Oracle Exalogic Elastic Cloud.

Saying it dramatically outperforms any comparable applications server at significantly lower prices, Oracle said the new system combines 30 6-core servers connected by Infiniband networking and is fully compatible with the Exadata Database Machine.

In addition, Ellison further extended his own commitment to the cloud by detailing the formation of the company's new Cloud Services business under the direction of Joanne Olsen, who recently came to Oracle from IBM.

Ellison said Oracle will combine its extensive but scattered cloud-computing initiatives under Olsen, who joined the company in June as senior VP of on-demand services. IBM contested Olsen's move, filing a lawsuit that attempted to block the move on the grounds that Olsen was in possession of confidential IBM intellectual property (read all about it in Oracle Woos And IBM Sues: Exec Who Knew Too Much.

"We spent a lot of time optimizing Oracle software to work on Exalogic to deliver extreme performance," Ellison said in his Sunday evening keynote, flanked by one of the new Exalogic devices.

"It's elastic, so that when you need more capacity, all you need to do is add virtual machines. It's completely fault-tolerant, scalable, and secure."

Ellison said IBM's systems can't match that capability, because "IBM's systems still have a number of places where you have a single point of failure—but on our new machines, there are none of those," he said.

To underscore the commitment Ellison and Oracle are making to cloud computing via the Exalogic machine, Ellison began his keynote speech—which ended up lasting about 90 minutes—with a disquisition on what, exactly, cloud computing is.

To describe Oracle's stance on what the cloud means, Ellison contrasted two companies' approaches to the cloud: Amazon and Salesforce.com.

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First, the Salesforce.com model, which he said involves offering SaaS applications via the Internet, and Amazon's EC2 Elastic Compute Cloud.

True to form, it became immediately apparent that Ellison was aligning the Oracle model with that of Amazon while also placing it in opposition to the Salesforce.com model: