Rackspace Finally Launches The Open Source Cloud

| About: Rackspace Hosting, (RAX)

To casual technology observers the headline reads like Groundhog Day. Didn't Rackspace (RAX) already offer an open source cloud? Isn't OpenStack, the open source cloud project of which it was the first sponsor, all about building an open source cloud?

Well, yes and no. Yes, Rackspace sponsors OpenStack (as do others, now, through the OpenStack Foundation). And, yes, Rackspace's share price is predicated on its use of OpenStack in its cloud.

But until now production servers at Rackspace were mainly running software called Mosso and SliceHost, from two companies Rackspace acquired before committing to OpenStack. Now it's offering a full OpenStack implementation, and while existing customers won't be migrated away directly, new customers will get OpenStack by default. The code base is code named Essex.

Many companies besides Rackspace are betting on the success of OpenStack in drawing customers away from the more-proprietary Amazon.Com (AMZN), Microsoft (MSFT) and Google (GOOG) clouds.

These include many global telecom companies as well as HP (HPQ) which already uses OpenStack in its HP Public Cloud, and Dell (DELL) which has been pushing OpenStack for a year.

There are elements of open source in all the proprietary clouds, as well as extensive support for the Linux operating system. But there weren't any complete open source clouds, making it impossible for cloud customers to switch providers.

But this is the way open source works. It always starts off from behind. It's always accused of copying. But by having a lot of people and companies committed to the code base, and by having them work together within a merit-based system, open source eventually catches up and passes all proprietary advantage.

That process has now begun in earnest with the cloud.

Disclosure: I am long GOOG, MSFT.