Stay on Top of Enterprise Technology Trends Get updates impacting your industry from our GigaOm Research Community

Update: Rackspace(s rax), the big hosting provider that launched the OpenStack open-source cloud project two years ago, is giving that project an important new stress test.

This week, it will start beta testing the software, running tens of thousands of computing instances as opposed to the hundreds under alpha test now, John Engates, Rackspace’s CTO, said Tuesday.

OpenStack’s goal is to provide an open-source software foundation for public or private clouds that would act as an alternative to proprietary technology from Amazon Web Services (s amzn) and VMware(s vmw), much as Linux was a counterweight to Windows(s msft) in PC and server operating systems.

The effort, initially driven by Rackspace and NASA, now has other big backers in Citrix(s ctsx), Dell(s dell), Hewlett-Packard(s hpq), Cisco(s csco) and others. Ericsson joined on Tuesday, and IBM(s ibm) is newly on board as well. Most of these companies plan their own OpenStack implementations. Internap(s inap) was the first company with an OpenStack cloud last October.

The Rackspace beta test will show how ready its OpenStack implementation is for prime time. “We need to run a much larger-scale deployment… ideally we’ll be doing the same types of workloads you’d see in production,” Engates said. His hope is that Rackspace-labelled OpenStack clouds will be open for business in the third or fourth quarter.

Up until now, Rackspace had been running the Slicehost technology it acquired in 2008, but that infrastructure was not designed for the scale Rackspace has achieved, he said.

The test comes at an interesting time. AWS remains the cloud-computing market leader by far but has shown some vulnerabilities. Last April, there was a much publicized outage that lasted several days. Six months later, a major reboot of Amazon Elastic Compute Cloud (EC2) instances also caused a stir. Such snafus have caused some customers who deploy workloads on just one (AWS) cloud platform to reconsider that policy. That could benefit OpenStack (and Rackspace).

OpenStack also picked up more momentum a few weeks ago when Cloudscaling, a respected consultancy, said it would focus on building a webscale OpenStack-based cloud to compete with the likes of AWS. (Update: Cloudscaling said it is building an OpenStack solution that service providers and companies can use if they want to deploy AWS-like infrastructure. Enabling customers to compete with AWS is not Cloudscaling’s focus, the company said.)

Rackspace charges more than Amazon for its infrastructure services, a strategy that is not likely to change, according to Engates. Having said that, he acknowledged there is need for a low-cost provider. “Amazon may be that, or maybe someone else may come along and out-Amazon Amazon,” he said.

Feature photo courtesy of morbuto.