Tareq Amin says Red Hat’s CentOS decision broke its business model
Red Hat’s decision in December 2020 to stop investing in CentOS, a Linux distribution channel used by some very large companies, did not go down well in some quarters. This week, Tareq Amin, CEO of Rakuten Mobile and Rakuten Symphony, said in a statement issued alongside the Fÿuz event that the companies would be replacing RHEL with Rocky Linux from CIQ Inc.
The notion is that without Red Hat’s support CentOS would fork away (deviate) from the open source community so CentOS users were being “forced” into paying subscriptions for RHEL. CentOS 8 users were expecting Red Hat to support it until 2029.
Amin was quoted saying, “I shouldn’t be forced to pay on a per-CPU licence – that really killed my business model. Imagine the number of Open RAN appliances – if each one has an inflated subscription fee then I have lost the game to legacy vendors.”
He reckons this decision will reduce the cost of that part of his network by 80% to support edge-based distributed units. Open RAN uses distributed units (DU) deployed across many sites – hence in Rakuten’s view, Red Hat a licensing models designed for enterprises with very many fewer sites just isn’t feasible. Not to mention 5G and Open RAN edge require high performance because they are sensitive to latency.
Taking another route
So Amin teamed up with one of CentOS’ founders, Greg Kurtzer. Apparently the two have been working together for 13 months to build a real-time kernel to run complex workloads and complies with the Linux open source community. In other words, no forking. It has taken all that time to get Rocky to the state where Mobile Rakuten can run on it and start to migrate to it without disrupting services to customers.
Rakuten Symphony has also removed RHEL from the 1&1 greenfield 5G network in Germany, which it is responsible for designing, deploying and managing.
Whether Rakuten’s lead is followed by other proponents of Open RAN who run or plan to run RHEL remains to be seen, but you can bet your boots Rakuten Symphony will be delighted to supply them with Rocky Linux as an alternative.
Even so, as Richard Webb, Director of Network Infrastructure at CCS Insight, commented about the general principle of an operator productising what it has created for its own use to sell to other operators, “could be a nice shortcut for other operators, saving them going through their own growing pains. Still, getting the pricing, right and matching technology from one network to another provider’s network is not easy to do: it’s not trivial.”
No money, no collaboration, no point?
Red Hat acquired CentOS in 2014, which was perceived as having a far, far bigger market share than it had resources. CentOS came into being in 2004 to bridge the gap between Red Hat’s two distributions – RHEL and Fedora Core. RHEL was paid for with commercial support and stability while Fedora Core was the free with many new technologies thrown into – and out of – the mix rapidly. It was all about experimentation and collaboration.
In his blog yesterday, Partha Seetala, President, Cloud Business Unit, Rakuten Symphony, almost hit the nail on the head: “CentOS changed from being a clone of the commercially licensed and supported Red Hat Enterprise Linux (RHEL) release to being a staging build for the next RHEL release.”
The key word he missed out is that it was free and lots of people have assumed that the move was due to senior management at IBM – which bought Red Hat in 2019 for $34 billion – wanting to squeeze more out of its investment. Red Hat denies it.
As ZDNET pointed out in December 2020, large companies including Disney, GoDaddy, RackSpace, Toyota and Verizon all relied on CentOS as a stable Linux distribution for their servers, virtual machines and appliances. And techco including GE, Riverbed, F5, Juniper Networks and Fortinet built their products round CentOS’ Linux.
Red Hat doesn’t make money from them via CentOS and ZDNET cited an ex-Red Hat exec commenting: “CentOS was gutting sales. The customer perception was ‘It’s from Red Hat and it’s a clone of RHEL, so it’s good to go!’ It’s not. It’s a second-rate copy…This is 100% defensive to stave off more losses to CentOS.”
Another former Red Hat person was quoted saying, “If it wasn’t for CentOS, Red Hat would have been a $10-billion company before Red Hat became a $1 billion company” which was in March 2012.
Further, there’s little value in the community for Red Hat, according to Mike McGrath, VP of Linux Engineering at Red Hat quoted in ITPro Today back then, “Most of the communities we set up, Fedora, for example, do have a lot of bidirectional community involvement. Unfortunately, CentOS was never like that. It was always a community of users, so that contribution model was mostly one way.”
Liked it so much bought the company, again?
Interesting that Rakuten Mobile opted for Red Hat OpenSwitch with a Cisco wrapper to run its virtual machines at launch, which was replaced by Robin.io’s architecture. Partha Seetala landed his current role in Rakuten Symphony when it acquired the company in May 2020 – he was Robin.io’s founder and CEO.
Previously Rakuten first invested in then acquired Altiostar because it used its tech. What’s the betting on CIQ? That might depend on the next earnings report.