At the Red Hat Summit and JBoss World gathering currently being held in Boston, IBM (ticker IBM) and Red Hat (ticker RHT) announced Tuesday they will collaborate to create products based on KVM (Kernel-based Virtual Machine) technology, aiming to drive open source virtualization in the enterprise.

Under the partnership, IBM and Red Hat will aim to create repeatable products and services based on KVM, which allows you to create multiple versions of Windows and Linux environments on one server. Already frequent partners on large enterprise deals, the two companies will jointly develop virtualization and cloud management interfaces via APIs connecting Red Hat Enterprise Virtualization Manager, IBM Director and Tivoli software. These APIs will govern cloud and data center automation, storage, networking and security. Should VMWare (ticker VMW) be worried? Remains to be seen.

Along with the general market indexes today, the stock prices of the companies are under pressure. IBM is currently trading at $170.50, down a little more than 1% from yesterday’s close. RHT is down even more so far today, off nearly 3% at $45.70. VMW is at $90.25, down nearly 10% from recent highs approaching $99 per share.