As Red Hat Enterprise Linux (RHEL) attempts to connect with cloud services providers (CSPs), the operating system seems to be facing surprise competition from a fierce rival. Microsoft Windows Azure? Nope. Ubuntu? Wrong again. The second coming of Unix? Not quite. Actually, the cloud OS rival could be CentOS — the free, unsupported version of Red Hat Enterprise Linux. Here’s why.

GigaOm claims some CSPs are balking at new Red Hat support fees. The popular media site suggests that some cloud services providers are closing their wallets and opting instead for CentOS. According to GigaOm:

Hmmm… The VAR Guy is intrigued. At least since 2006, CIOs have viewed Red Hat as one of the world’s top software companies in terms of customer value, flexibility, and responsiveness. (Source: CIO Insight.)

Do cloud services change that equation? Hmmm… On-premises server sales apparently are shrinking as customers increasingly shift their apps, platforms and infrastructure to cloud services providers. And a large number of CSPs invest in their own support teams rather than paying open source companies for support.

An example: Ubuntu is the most popular Linux distribution running in the Rackspace cloud, The VAR Guy has heard. But does Canonical — the company behind Ubuntu — generate substantial support fees from Rackspace? The VAR Guy believes the answer to that riddle is no.

Still, Red Hat has a slightly different business story and business history. While Canonical is still seeking multiple ways to monetize the Ubuntu business. Red Hat, in stark contrast, recently become the world’s first independent open source company to achieve $1 billion in annual revenues. And Red Hat has branched out into virtualization, middleware and storage.

CIOs still love Red Hat, The VAR Guy believes. But our resident blogger will be watching the alleged per-socket pricing model, and the potential implications for Red Hat — and CentOS — among cloud services providers.