"Oracle is brushing off challenges from Amazon Web Services"
Erm, in what way is this a *challenge* from AWS exactly?
This is running real Oracle software, on AWS hardware. Presumably AWS have struck a licencing deal with Oracle to do this; and on terms that Oracle is happy with. They also let you bring in your existing Oracle licences:
https://aws.amazon.com/oracle/
So this is simply locking people into ongoing Oracle licencing, one way or the other. Oracle should be very happy with that.
Or is the article simply saying that Oracle would rather people put their Oracle apps in Oracle's own also-ran cloud? Maybe that's true, but why should Oracle worry? Cloud hosting is a cut-throat, low-margin business compared to its database and application licencing.