Red Hat, Rackspace higher following report of Red Hat/Dell partnership

|About: Rackspace Hosting, Inc. (RAX)|By:, SA News Editor

AllThingsD reports Red Hat (RHT +1.3%) will announce a major cloud infrastructure (IaaS) partnership with newly-private Dell later today that revolves around Red Hat's OpenStack IaaS offerings. Red Hat has moved higher, and so has major OpenStack supporter Rackspace (RAX +7%).

Dell and Red Hat, who already have a long-standing Linux partnership, will reportedly "develop an enterprise-grade version of OpenStack" based on the new Havana release. Dell will sell systems featuring Red Hat's OpenStack software, and provide related services.

Such a tie-up would help Dell counter rivals such as H-P and IBM, who have aggressively rolled out and/or acquired IaaS platforms. It would also help Red Hat gain IaaS share as it contends with tough competition from Amazon and a slew of smaller players.

While Amazon towers over the public cloud IaaS market, the Red Hat/Dell solution would focus on enabling private/hybrid cloud deployments. Microsoft and VMware (among others) provide direct competition in this space.

Red Hat's FQ3 report arrives on Dec. 19.

Update: Dell and Red Hat have made their partnership official. Red Hat has given up its early gains, but Rackspace remains sharply higher.