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TheStreet Open House

Red Hat Aims Its Cloud at Bigger Rival VMware

Stocks in this article: VMWRHTEMCRAX

BOSTON ( TheStreet) -- Red Hat (RHT) has decided its place in the cloud computing sunlight depends on taking on VMware (VMW).

VMware has the early lead. Companies that have created "virtual" servers to save on data center hardware have been using its vSphere for years. The software has evolved into a full cloud operating system. Many store their data mountains inside EMC data server devices -- EMC (EMC) owns 80% of the company. VMware's vCloud lets companies move virtualized workspaces into the public cloud.

The trouble is these are closed-source, proprietary products. Customers that commit to VMware are locked in just as securely as if they'd bought Microsoft Windows.

Or so goes the Red Hat argument.

At its Red Hat Summit in Boston this week, the company took direct aim at VMware with what it calls Hybrid IaaS. This combines Red Hat Enterprise Linux, virtualization and CloudForms cloud management for $500 per cloud instance. VMware charges $502/instance for virtualization alone.

Red Hat is also taking aim at VMware parent EMC's network storage business with Red Hat Storage Server 2.0, also announced at the summit. RHSS is based on Gluster, an open source project acquired last year. Its aim is to let companies build cloud storage from commodity hardware rather than specialized servers.

Ranga Rangachari, vice president and general manager for storage, said RHSS can cut the cost of storing a gigabyte of cloud data from $1.10 to 29 cents "with better performance" because storage is integrated into the cloud rather than sitting on a separate device.

The full Platform as a Service (PaaS) offering, called OpenShift, is designed to ride on a cloud infrastructure, and Red Hat recently committed to OpenStack, first sponsored by Rackspace (RAX), for its Infrastructure as a Service (IaaS) offering. That's one difference between being proprietary and being open source -- community momentum can drive your decisions.

But another difference is that you're commercializing software that people can also get free. Red Hat's flagship Red Hat Enterprise Linux product is based on Fedora, a free Linux. And Red Hat Network Storage is based on Gluster, an open source project acquired just last year.

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