Apache Takes Citrix Systems' CloudStack: Is Rackspace In Trouble?

| About: Citrix Systems, (CTXS)
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Citrix Systems (CTXS) has released Cloudstack, an open source cloud infrastructure system acquired with Cloud.com, to the Apache Foundation.

This sounds like a deliberate move against Rackspace (RAX), whose OpenStack project has drawn fire for being under the control of its sponsor despite Rackspace's move to create a separate foundation to run it.

Cloudstack and Openstack are competing for programmer love as both seek to become closer competitors with proprietary cloud stacks such as those of VMWare (VMW) and Microsoft (MSFT), along with Eucalyptus, a private company whose stack is interface compatible with the Application Program Interface, or API, of Amazon's (AMZN) Amazon Web Services, the public cloud leader.

Cloudstack was always open source, but the move to Apache is important because Apache provides credibility to open source programmers and users, through its governance structure. Openstack is offered under the Apache license, but using the license and being supported by the foundation are different.

Among the companies using Cloudstack for their clouds are Zynga (ZNGA), Bechtel and GoDaddy.

In an interview with GigaOm, Citrix cloud platforms group VP of marketing Peder Ulander also said that the company will push for a closer relationship with Amazon, saying its API is a "de-facto standard" and that OpenStack's efforts to build its own API is thus unnecessary. Openstack says it has had compatibility with the Amazon API from the beginning.

For now, it appears that open source cloud developers are hedging their bets, many of them working with both OpenStack and CloudStack.

Investors might want to note the recent performance of both CTXS and RAX. Seen over a distance of a month or less, the stock of CTXS has been gaining a little faster. Take it to the start of 2012 and the two are about even. Taken from the perspective of a year, however, Rackspace has done much better.

Investors need to ask themselves two questions. First, to what extent are the latest CTXS moves a serious threat to Rackspace's open source model, and to what extent do they represent marketing? Second, has the cloud standards race already been run, with Amazon the obvious winner?

My money is on Amazon. Please feel free to disagree.

Disclosure: I am long AMZN.