The problem with Cloud Computing is that no two experts can agree what it really is, right? Wrong! As of Sunday evening, we at least have two major players singing from the same psalm book.

At Oracle Open World in San Francisco, Larry Ellison went public with the announcement that not only does he agree with Amazon on their definition of Cloud Computing; he is actually stealing their thunder, or at least the thunder of the name Amazon invented to describe their cloud services, namely “Elastic Cloud”.

He also gave a firm answer to the age-old question, is Cloud Computing an application or a platform. The latter, the man who feels equally at home at the helm of a racing yacht or an international computer company stated in no uncertain terms, hurling a bolt of devastating lighting an, which to him is “just a couple of applications on the Internet”.

So here is Larry’s definition of Cloud Computing, just in case you wondered. It is a pool of resources for developing and sharing applications, so it’s a platform, stupid! It involves virtualization, so if it isn’t virtual, it ain’t cloud. It uses “elastic” technology so it can scale quickly and easily (and back, too: users should be able to get rid of resources they no longer need just as simply as they can dial them up). And did I mention pricing? You only pay for what you eat, of course.

Ellison is  man who practices what he preaches. So the riddle of the grey cabinet the size of a large dresser standing next to him on the stage of Moscone Center was soon solved. Nicknamed the “Cloud in a Box”, the new product he announced is officially called the “Exalogic Elastic Cloud” and consists of 30 servers running in parallel with its very own storage array, two separate operating systems (Solaris for the hadware, Linus for the software) VM and middleware (by Oracle, of course), all tightly packed into a single closet-sized unit. It represents nothing less than you very own private cloud that you can install and run behind your corporate firewall thus eliminating all those worrisome questions about security that till now have kept CIOs from jumping on the cloud bandwagon. This, Ellison declared, is the future of Cloud Computing.

Well, if so, then the future belongs to some very large companies, namely those that can afford the price tag of over a million dollars per unit. For those willing and able to put up the money, the future is bright. Facebook, Ellison boasted, could run all the transactions between their 500,000 members on just two of these boxes. And the China State Railroad, he said, is already handling their entire ticketing system on a single Exalogic system. No, EEC is not a charming little cloud you buy in a gift box – it’s a brute of a system, and don’t you forget it!

That Ellison chose his opening keynote at the largest in-house IT tradeshow on the planet to announce his elastic cloud sends an important message, especially since he has been on the record in the past as a hardnosed cloud skeptic. In fact, the box represents the culmination of a strategy that he ha been following for years and that has kept most experts slightly baffled. Why would you turn a dedicated database manufacturer into a software and hardware giant by acquiring first Siebel and Peoplesoft, then Sun Microsystems (antagonizing a hitherto friendly rival, IBM, in the process)?

Well, the answer is encapsulated in the new corporate motto Ellison also announced in San Francisco: „Software and hadware – engineered to work together“. By developing both software and hardware simultaneously and linking them closely together, Oracle wants to offer customers all they need from a single source. And of course grapple them tightly to a single source of supply.

The cloud is a smart way of doing this, given that most CIOs remain wary of the entire idea, mainly for security reasons. By reducing the cloud to a handy format that fits inside a box that they can run themselves behind their firewalls, Oracle may lay most of those worries to rest and succeed where other vendors have yet to prove that they can generate widespread enthusiasm for Cloud Computing among big international customers.

We were not so convinced about Ellison’s strategy for “co-maintenance” of the Exalogic machine. He didn’t make it clear in his remarks whether Oracle admins will simply be peering over their clients’ shoulders, or whether they will be actively interfering with the everyday running of the product. In principle it makes sense for Oracle to keep a tight leash, since every Exalogic box will be configured identically, so if a problem crops up on one machine, they can send out a fix to all the other customers, hopefully before they are even aware of the problem. However, we feel that this may eventually lead to some nasty liability issues, not to mention compliance and auditing hassles. Okay, most of these can be solves through SLAs. But it seems to us that work remains to be done on the tricky issues of managing privileged accounts as a way to monitor in-house admins and external cloud providers, but hardly anybody seems to be doing it correctly yet, for instance by combining PxM with DRM or IRM solutions.

Finally, he big unanswered question in the cavernous hall of Mocsone Center was this: What is the future of the relationship between Oracle and Amazon? Anybody who knows Larry knows that he doesn’t bestow praise on a rival without hindthought. So how does this sound for a conspiracy theory? Having agreed with Amazon on a common definition of Cloud Computing (and actually naming his product after theirs), Ellison will set out to acquire Amazon’s cloud business, which he will then rebrand as “Oracle Exalogix EC2”. Wanna bet? Winnings to be collected at the next Oracle Open World.