This is just part of Larry Ellison's talk about cloud computing, it was made to keep shareholders happy by downplaying the hype for cloud computing, it's not about the technology itself.

Larry Ellison doesn't like cloud computing because despite all the benefits of this advancement it would turn his companies business models upside down. Oracle would lose large amounts of money because they rely on massive licensing deals and expensive maintenance (assuming they go SaaS).

They have developed an independent unit to build out their on-demand efforts, just as Innovators Dilemma recommends when faced with a disruptive technology.

But the market is still to new and if Oracle made a major shift toward it, it would cannibalize a large portion of their profits. Therefore dropping the share price.