Cloud Hosting  giant Rackspace could be among the first to deliver private versions of Microsoft’s Azure cloud, free of Redmond’s control.  Rackspace CTO  John Engates said: “I think it’s a great idea to allow private versions of Azure because realistically, Microsoft can’t run all the world’s IT in its own data centers.” He added: “If and when we get strong demand for Azure in our datacenter, we’ll certainly consider offering it.”

Microsoft earlier this week announced the Windows Azure Platform Appliance containing Windows Azure compute and SQL Azure storage. The service provider believes it’s got the experience in hosting and .NET to make Azure usable and to help ease customers concerns over the newness of the architecture – most, for example, won’t even know what SQL Azure is or be willing to commit at this stage.

We’ll see if the Microsoft Azure platform will end up in Rackspace data centers.  For now, it’s not in there.  I’m betting that in the next 3 months Microsoft Azure and Rackspace will be partners in this new venture. Lew Moorman, Rackspace’s president for cloud and chief strategy officer, said: “It’s like house hunting and buying the house and every single element in it. You can’t customize or do your own thing, and that’s a big commitment for people… In time we could host it, but people are nervous about giving everything to Microsoft.”