Rocky Linux developer CIQ raises $26M to recreate CentOS for enterprises

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CIQ, a company that’s setting out to commercialize a new open-source Linux distribution and CentOS-successor called Rocky Linux, has raised $26 million in a series A round of funding.

The raise comes a little more than a year after CIQ emerged from stealth (originally as “Ctrl IQ”), spearheaded by one of CentOS’s original creators, Gregory Kurtzer. Moreover, today’s news follows shortly after CIQ inked a major deal with Google to help support companies looking to deploy Rocky Linux on Google’s cloud infrastructure.

While it’s still early days for CIQ, it seems things have gotten off to a solid start — the open-source Rocky Linux project is notching up as many as 250,000 downloads in some months, and its fresh cash injection could go some way toward helping it become one of the major Linux distributions for enterprises.

“Rocky Linux has been a rocketship in terms of uptake across the enterprise and cloud,” Kurtzer told VentureBeat.

Everyone loves Linux

As the bedrock of countless modern consumer and enterprise systems, from smartphones and automobiles, to web servers and beyond, Linux requires little introduction. Thirty years on from its inception, it’s perhaps clearer than ever that Linux has thrived for the most part due to its open-source foundation, enabling companies to escape the clutches of proprietary vendors and monopolies.

But Linux also serves as a good example of how open-source software can be a highly monetizable endeavor, with businesses selling services, support, and premium features on top of the core community-driven project. Red Hat, for example, is well-known for its commercial Linux distribution, and is one of the reasons IBM doled out a cool $34 billion for the company four years ago, while Suse has built a billion-dollar business off the back of Linux. And Android, which is based on a modified version of the Linux kernel, has made Google a hell of a lot of money.

The open-source CentOS project, meanwhile, was at one point the most popular Linux distribution for web servers. So in 2014, Red Hat essentially acquired CentOS, including all trademarks, to complement its commercial Red Hat Enterprise Linux (RHEL) product. While RHEL was to be for enterprise-grade projects requiring robust security and support (at a price), CentOS was offered for projects where developers or companies required a stable, production-ready Linux distribution without the costly commercial support from Red Hat.

In many ways, CentOS’s days were always numbered, however, given that it was effectively a (free) RHEL clone. Red Hat announced in late 2020 that the latest version of CentOS, based on RHEL 8, would no longer be supported from 2022 onwards, and instead it would focus its entire efforts on a new “upstream” version of RHEL called CentOS Stream. However, this new CentOS-branded product wasn’t really the same deal as CentOS, and for many, it lacked the stability of the original community-supported CentOS product.

“CentOS has been one of the most dominant operating systems for enterprise use-cases,” Kurtzer explained. “To put it into perspective, imagine that 20-25% of all servers sold from Dell, HPE, and every other hardware vendor was running CentOS. When Red Hat acquired CentOS and ‘end-of-lifed’ the project, this negatively affected so many people.”

And that is why Kurtzer went back to the drawing board and started work on the new RHEL fork, which is touted as an “open-source enterprise operating system designed to be 100% bug-for-bug compatible” with Red Hat Enterprise Linux.

Fork in the road

As with other flavors of Linux, Rocky Linux is designed as an operating system for physical hardware, virtual machines (VMs), cloud instances, and containers. Like REHL, CentOS, Ubuntu, and all the rest, Rocky Linux is the interface between hardware and applications.

The core open-source Rocky Linux project promises to be “enterprise-ready” out-of-the-box, with regular updates and a 10-year support commitment to encourage businesses to dive in head-first. While CIQ is the official founding sponsor and services partner, it promises to add value to Rocky Linux “without holding it hostage,” according to Kurtzer. “We offer a new model for support, where we support people, not hardware,” he said.

What this means is that CIQ doesn’t count things like servers, cores, sockets, or entitlements — the number of systems, VMs, or cloud instances is not on the agenda in terms of how CIQ is looking to make money.

“Counting hardware for support is a legacy and, specifically, vendor-serving model, it doesn’t help the customer do what is needed for their success,” Kurtzer said. “We bullishly put the customer first, no exceptions.”

What CIQ does offer is things like imaging and provisioning via Warewulf, and a “repository-as-a-service” (RaaS), through which CIQ optimizes and guarantees updates for organizations, providing them with infrastructure for maintaining client systems. Services and service-level agreements are the name of the game.

“Using RaaS, we can add enhancements for various organization-specific requirements — for example, additional packages, updated versions, or enhanced, optimized kernels, as well as security additions to maintain supply chain integrity,” Kurtzer said.

But when all is said and done, will yet another Linux fork kickstart a gargantuan battle in the open-source community? Not necessarily, according to Kurtzer, who thinks that everyone can get along nicely.

“While the community was very unhappy with CentOS being killed early, CentOS Stream offers a positive — but different — opportunity for the community to all work collaboratively together,” he said. “Red Hat controls CentOS Stream, as they did CentOS, but if we take this move [CentOS Steam launch] at face value and in good faith, this is a good move for the enterprise Linux community. We have already contributed fixes back upstream into CentOS Stream, and we hope to be a valuable member of the development community — for as long as Red Hat allows it.”

CIQ’s $26 million series A round was led by Two Bear Capital, with participation from other unnamed investors.

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