The server virtualization and public cloud service market is dominated by three players: VMware, Microsoft and Citrix, and three hypervisors: vSphere, Hyper-V and Xen.

So it’s easy to forget that there’s a fourth player, in the form of Red Hat, its KVM hypervisor, and its Red Hat Enterprise Virtualization (RHEV) platform. RHEV has been coming on quite nicely in terms of development since its launch in 2009, and RHEV 3 was officially released in January of this year.

But despite the introduction of heavyweight features, including Live Migration and the ability to support up to 160 cores and up to 2TB of RAM on each host, RHEV has so far achieved a tiny market share — fewer than 2 percent of companies use RHEV as their primary virtualization platform, according to the V-Index.

In fact, the V-Index probably does Red Hat an injustice because a fair number of companies do use RHEL, but just not as their primary virtualization platform: 80 percent of RHEV users actually use it as a complement to an existing VMware implementation, according to Red Hat. The company said that’s because most companies start by virtualizing their less-than-critical Windows servers on VMware, and they are now beginning to virtualize their more mission-critical Linux machines (running Red Hat Enterprise Linux, of course) on RHEV.

That may be true, but when it comes to the public cloud, the news is all about VMware’s vCloud, Microsoft’s Azure, the Citrix-sponsored CloudStack, OpenStack and … very little about RHEV.

However it does seem that, finally, Red Hat is starting to make some impact in the public cloud. Last week, the company announced a little-known (outside Italy, anyway) Italian telecom operator and service provider called CDLAN is basing its new SaaS platform, offering ERP, email and e-learning applications, on RHEV. Or, as Red Hat rather grandly puts it: Italian Telecommunications Operator Builds Cloud with Red Hat Enterprise Virtualization.

At the time that RHEV 3 was released, Navin Thadani, the company’s top virtualization technology chap, said: “With the new enhancements in RHEV 3 we are more closely aligned with VMware features-wise.” He also said that with the virtualization platform’s per-socket pricing and free management system, RHEV could cost one seventh that of a similar VMware deployment in the first year, and over three years, RHEV could cost about one-third as much.

But that’s for bog-standard server virtualization. What about public cloud implementations? Well according to Red Hat, RHEV “has reduced CDLAN’s overall technology infrastructure costs by 60% since deployed as compared with comparable proprietary solutions.” It’s not quite clear what that means precisely, but it’s probably fair to say that the general gist is that the RHEV solution is less expensive — by quite a lot — than a similar VMware-based solution.

The key point, however, is that CDLAN chose to build its cloud service on top of RHEV, not any of the other more mainstream cloud computing platforms. Cost no doubt played a big part in the decision, but no one chooses a low-cost solution if it is not up to the job at hand.

Of course, one RHEV cloud implementation doesn’t make a trend any more than one swallow makes a summer, but there are a lot of companies, including service providers, that are big Red Hat customers. That means there’s certainly the potential for RHEV to make a far bigger impact on the cloud computing market than it has to date — especially if it’s cheap. Could this, finally, be the beginning?