Gartner predicts the cloud computing market will be worth $58 billion this year, as compared to $50 billion last year worldwide.  That means big opportunities for top industry players including Amazon, Microsoft, IBM, and others, all developing a focus on growth with this potential new market.

Oracle, on the other hand, is a late comer in sellin services on the cloud and virtualization bandwagon.  After having failed to recognize the potential of cloud and virtualization, Oracle revealed the company’s plans for cloud computing, encompassing Iaas, PaaS and SaaS at the recently concluded OpenWorld conference.

The event provided a good opportunity for the company to highlight its solutions for the cloud, and offerings in big data and social enterprise. Oracle rolled out its cloud vision, which is to provide a complete suite of enterprise-grade applications supplemented by a comprehensive software and hardware platform for developers on a consistent enterprise service layer for development flexibility.

This was also the time for Oracle to launch the next big thing in virtualization. The company launched Oracle Exadata X3, which is an aggressive move to give customers the most complete and integrated virtualization. It offers four times more memory (2-4 TB DRAM + 22 TB Flash) at the same price as X2.

“Oracle has taken an iron maiden approach to embracing virtualization, focusing on simplified provisioning inside big hardware appliances like Exadata. Enterprises with sufficient scale can benefit from a wholly integrated approach, but it runs counter to flexibility and open accessibility, primary drivers for virtualization and the cloud,” says Jed Yueh, CEO of Delphix, a company that provides database virtualization services.

“By focusing on the data, we take a broader, more open approach to virtualization,” Yueh continues. Our software connects and synchronizes data from a multitude of sources—from Exadata to databases running on Solaris, HP-UX, Linux, etc.–and then quickly delivers virtual copies to the right teams at the right time, without generating additional hardware requirements.”

Can Oracle ever leapfrog VMware?

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Oracle recently announced the Unbreakable Enterprise Kernel Release 2 for Oracle Linux platform. The company claims the new release includes performance and scalability, improved memory and resource management, and is optimized to be deployed as a virtual guest. Plus, the company made Enterprise Kernel Release 2 Oracle Linux compatible with Red Hat Enterprise Linux.

In addition, Oracle has also invested in its virtualization technology – Oracle VM 3.0 that offers four times the scalability of VMware at a fraction of the cost from desktop to the data center.

Oracle’s recent acquisition of Xsigo Systems, a leading provider of network virtualization technology, will help the company to build network-based virtualization capabilities and simplify management of their clouds by delivering compute, storage and network resources that can be dynamically reallocated on-demand.

But despite new releases and updates, Red Hat and VMware both continue to lead the market, each delivering double-digit revenue growth. For channel partners, demand for VMware-related products on cloud computing and virtualization continues to grow. The company’s revenue reached from $8 million (in 2001) to the $3.77 billion in 2011. Red Hat recently became the world’s first company to cross one billion purely on open source.

“Oracle arrives late to the cloud game. So late in fact, that any move the company now makes is seen as another “me too” tactic, rather than true leadership or innovation. More so, the company’s recent steps often flat out contradict some of Oracle’s own statements and predictions about the cloud and where the market is heading,” says Xeround CEO Razi Sharir.

No multi-tenancy offerings

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Oracle’s other pain point is that the company’s single-storage Oracle installation doesn’t offer multi-tenancy of databases in the cloud. Multi-tenancy allows sharing of hardware to IT vendors to get infrastructure costs down, scale-out cost effectively and enjoy unlimited throughput and computing power.

Now, Oracle is trying to appeal with its new 12c database specifically designed for virtualization to private cloud providers along with its recently developed Exa-line of servers. The new database is designed to support multitenancy and allow for several databases in a single container.

“Getting into the game too late, too slow, and with too much baggage – it feels Oracle is trying to follow the best of them (mainly Salesforce.com) to ‘cloudify’ its offering,” Sharir goes on. “Yet, it seems the focus of its strategy is possibly to increase revenues from its existing customer base, by offering them additional SaaS applications that they would otherwise shop for elsewhere.

“Will it succeed in acquiring new users to its public cloud offering and gain traction in the developers’ community (historically not big fans of Oracle) – that still remains to be seen,” said Sharir.