Red Hat, IBM form mainframe partnership

By Jim Finkle

BOSTON (Reuters) - Red Hat Inc. (RHT.N: Quote, Profile, Research, Stock Buzz) and IBM (IBM.N: Quote, Profile, Research, Stock Buzz) formed a partnership to develop, sell and support Red Hat's Linux software for IBM's mainframe computers, people familiar with the arrangement said on Tuesday.

The agreement, which the companies plan to announce at a Red Hat users conference that begins on Wednesday, applies to Linux software for International Business Machine Corp.'s System z mainframe computer systems, the sources said.

The vast majority of Linux software that is currently used on System z is from Red Hat's main rival, Novell Inc. (NOVL.O: Quote, Profile, Research, Stock Buzz)

IBM's partnership with Red Hat is an endorsement of advances that the software maker has made in adapting its technology for use by large institutions, analysts said.

"It's potentially a huge credibility gain for Red Hat," said Trip Chowdhry, an analyst with Global Technology Research. "It shows that Red Hat is enterprise class."

IBM and Red Hat declined comment.

IBM and Novell have long worked together on developing, selling and servicing Novell's SUSE version of the Linux operating system for use on IBM's System z computers.

The IBM, Red Hat tie-up creates a similar cooperation. They form a joint engineering team to expand the capabilities of the Linux software, including enhancing security on the mainframe computers, according to the people familiar with their plans.