Ellison's presentation proved that "Fusion apps are real," said Ray Wang, a partner with the analyst firm Altimeter Group.

While Oracle "definitely has the capability to deliver this as SaaS, it's really up to them to figure out if they want to enter [that market] large-scale," Wang added. In some product areas, such as talent management, "they can't compete without the SaaS option," he said.

SaaS applications are different from straight application hosting, because they use a "multitenant" architecture wherein customers share a single instance of an application but their data is kept private from other customers. In a presentation Tuesday, on-demand CRM (customer relationship management) vendor and Oracle rival Salesforce.com compared multitenancy to an office building, where individual tenants share the overall infrastructure but customize their office spaces.

Oracle "will definitely" offer a hosted version of Fusion Applications, although it remains to be seen exactly how their SaaS strategy for the software plays out, Wang said.

When Fusion Applications arrive, they will also raise the competitive stakes between Oracle and its main rival, SAP.