It's tough for investors to get their arms around open source and the cloud.
But the first holds the key to understanding the second. Open source allows competitors to cooperate, and the more cooperative they are the more powerful they become as competitors.
Another way of saying that is the more you give to an open source project, the more you and your customers get from it. Call it the Lennon Principle of Open Source -- the love you take is equal to the love you make for open source. It's not enough to just join - you need to contribute or it's just noise.
VMware has become a "gold" sponsor of OpenStack but, as Charles Babcock notes at Information Week, it was not a major contributor to the current version. Its participation so far is to enable support for its own proprietary ESX hypervisor from within the open source platform.
VMware is one of many companies trying to attach themselves to OpenStack, whose halo effect drew 1,400 to its recent San Diego summit meeting when only 1,000 had registered. Rackspace, however, remains the biggest committer, with 973 changes made to the latest release, called Folsom, from 49 people.
The second-largest committer was RedHat (NYSE:RHT), which had 861 changes approved. RedHat is working its own supported version of the software. So if you're an enterprise looking to build a private cloud with OpenStack, it's going to be RedHat or download and roll-your-own for some time. (Unless you're handing your cloud development off to someone else, and what large enterprise is going to do that, given the importance of cloud's money-saving properties to future budgets?)
If VMware is truly committed to the project, in other words, it will have a lot of commitments, and committers, in the next release, dubbed Grizzly, now scheduled for the spring. It will also start delivering VMware support for some version of OpenStack, even if just one that includes ESX. Everything else is self-serving noise, although it must be remembered that ESX is dominant in the virtualization market, over the KVM hypervisor on which OpenStack was originally based.
In short, advantage Red Hat.
Disclosure: I am long RHT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.