Oracle selling higher-end products as a service makes total sense, and I agree, the subscription model has potential to make them a good deal of money. What I'm getting at, however, is why are they so aggressively taking on Amazon in the IaaS space? That's the part which doesn't make sense on the surface--they show up late and then attempt to compete on price. Since when has Oracle competed on price?

The conclusion I come to is that Amazon must be eating away at their customer base. Once a customer starts to move some of their IT into AWS, and it goes well, that puts Oracle on the defensive--not a spot they like to be in.

I doubt Oracle really wants to be in the IaaS business just for the sake of IaaS. They want to focus on higher-margin services. The IaaS part must be a defensive move to keep customers away from AWS and within the Oracle ecosystem.