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Oracle(s orcl) execs do not typically like to utter the “C-word.” Oracle CEO Larry Ellison has engineered (pardon the pun) the company’s move from “commodity” servers to costlier “engineered systems.” The company pushes its database and applications as high-end enterprise-class software — worthy of high support charges. But apparently, commodity cloud infrastructure is one area where the software giant intends to play and play hard starting next year.

“Down at the infrastructure level, we intend to be price competitive with Amazon(s amzn) and Microsoft(s msft) Azure and Rackspace(s rax). So we intend to compete aggressively in, what I will call — commodity not being a bad word — the commodity Infrastructure-as-a-Service marketplace,” Ellison told analysts on the company’s second quarter earnings call last week.

That Oracle IaaS is envisioned as a platform to run all that higher-end Oracle software goodness. The idea, Ellison continued “is to sell our customers infrastructure as a service and the same customer a highly differentiated platform as a service will let us get better margins and highly differentiated suite of enterprise applications for the cloud.”

So, Oracle will be cost- and price-competitive in infrastructure “while being highly differentiated at both the platform level and the application level,” Ellison said. (SeekingAlpha has the full transcript.) In short the message is: IaaS is table stakes, the real dough lies in Software as a Service (SaaS) and what Ellison called a “highly differentiated” Platform as a Service (PaaS) that will provide it Oracle-like margins on enterprise applications.

On the call, Ellison claimed that Oracle has more enterprise SaaS applications than any other cloud services provider — a statement that has to raise eyebrows up the road at Salesforce.com(s crm) and Microsoft(s msft), which claims that Office 365 is the most-widely deployed SaaS application. Sanford Bernstein analyst Mark Moerdler said Oracle has seen good traction in human capital management (HCM), sales force automation and ERP SaaS applications which saw triple-digit growth.

Ellison has made noises about entering the Infrastructure-as-a-Service (IaaS) space before, but last week’s statements turned up the volume. Given the concerted push Amazon Web Services is making into enterprise accounts, financial analysts following legacy enterprise vendors want to know their response.

In a research note, Nomura Securities analyst Rick Sherlund, pointed to Oracle opening up its 17th data center worldwide as proof that its building out infrastructure for this cloud push.

However well Oracle does in this big endeavor, Ellison’s newly stated cloud ambitions lie in stark contrast to his statements decrying cloud as a fad a few years back. His words still echo, so Oracle has a lot to prove in the cloud arena.