SUSE Dropping OpenStack Cloud to Focus on Core Platforms

SUSE is getting out of the OpenStack marketplace, ending the development and availability of its SUSE OpenStack Cloud products and services as the company pivots to focus more strategically on its Linux and other open source software product lines.

The move was unveiled in a blog by Michael Miller, the company’s president of corporate development and strategic alliances, who described the decision as part of a top-to-bottom review of the company’s core offerings and competitive strategy, as well as a reflection of customer demand.

SUSE’s Michael Miller

“The decision is not a referendum on OpenStack,” Miller told Channel Futures. “This will help us better serve customers and align us with the long-term future of the industry.”

The company’s product and strategy re-evaluation comes just after two huge events in its history this year. In March, SUSE was acquired by investment company EQT Partners after being sold by its previous owner, Micro Focus. In Jul,y the company named a new CEO, Melissa Di Donato, as the first woman to take the company’s helm since SUSE was founded in 1992.

The $2.5 billion acquisition by EQT ended more than four years of SUSE ownership by Micro Focus and is the fourth involving SUSE since 2004. SUSE’s previous owners also include Novell and Attachmate. The deal was seen by analysts as a move that should be beneficial to partners and customers as SUSE gains more control over its path in the IT industry. Di Donato came to SUSE Linux from SAP, where she served as chief operating officer and chief revenue officer since 2016. She replaced Nils Brauckmann, who had led SUSE for eight years as CEO.

“We’ve recently gone through a really thorough, broad and deep strategic planning process that began with the Micro Focus separation and when we became a standalone company,” said Miller. “It was a perfect time to do that.”

The move was further accelerated by the company’s leadership change, which also spurred the company’s internal analysis of its business.

“Through that process we considered what is happening in the market and where our customers are going and how we can position ourselves to provide strategic help for them,” he said. “We can’t be everything to everyone.”

Miller would not discuss how many OpenStack customers SUSE has and how many will be affected by this decision, but he said the company has been talking with customers and partners about how it will assist them in their transitions to other OpenStack platforms and services.

“We’ve been talking with our customers about where it is going in the future and what are their plans for their workloads,” said Miller, “We’ve informed all our customers of the decision and are actively engaged in how to help them move forward and transition them forward.”

Even as SUSE ends the sales of new OpenStack contracts, it will continue to provide SUSE OpenStack support for existing customers through the end of their current contracts, as long as it is needed, said Miller.

“We will work with them to determine where it goes from there,” he said. “If they want to transition to something else before that, we will help them. There’s not a specific cutoff date for everybody. It’s just based on existing subscriptions.”

SUSE will work closely with its customers to ensure they get the service and support they expect from the company, he said.

Several analysts have divergent views about SUSE’s move.

Tony Iams of Gartner said it makes sense that SUSE wants to …

… focus more on application delivery for customers by shifting its investment toward cloud-native, container-based technologies such as function as a service, serverless and service mesh.

Gartner’s Tony Iams

“It’s never easy to make a major change in product strategy like this, but it’s better to make a clean break and disclose plans to customers, rather than allow the product to wither gradually and obliquely,” said Iams. “The most important steps in this process will be for SUSE to provide clear guidance for its existing OpenStack customers to make a graceful transition to alternative solutions, and to quickly show how it will execute on its new cloud-native initiatives.”

Bill Weinberg, principal analyst with The Linux Pundit, said the move by SUSE to drop its OpenShift strategy is not a surprise.

“The OpenStack.org community has always been a noisy place with lots of jostling for visible leadership,” he said. “Over the past three years, technical contributions have remained strong from a few companies such as Red Hat, but there has been much consortium member attrition and fall-off in commitment level.”

Weinberg said he’s also not surprised that SUSE is dropping the OpenStack ball so casually.

“Their actual customer base is likely a size that they were able to reach out to on a one-to-one basis long before their public announcement,” he said.

Other factors in SUSE’s decision likely involved issues such as OpenStack’s mainstream position in the marketplace, which leaves it little technical or marketing cachet in terms of being involved with it or bundling it, said Weinberg. In addition, IBM’s recent acquisition of Red Hat has tilted the OpenStack-based private cloud market away from all but the best-funded players, leaving more of a challenge for SUSE, he said.

“SUSE qualifies in this regard but they’ve never in my opinion shown strong leadership in the consortium or in marketplaces outside of their European home court. In other words, OpenStack is a high-cost, low-return checkbox for SUSE.”

Enderle Group’s Rob Enderle

Another analyst, Rob Enderle of Enderle Group, however, sees SUSE’s dropping of OpenStack as a breach of trust with its customers that will be hard for the company to recover from.

“Typically you’d provide months if not years of notice before doing something like this suggesting the company has serious issues,” said Enderle. “This move is similar to concluding, on a lifeboat, that it’s time to draw straws for people to go for their last swim. You breach trust like this, and the firm may not recover because buyers begin to wonder what you’ll cut next, and your competitors [fear, uncertainty and doubt’] you into nonexistence.”

SUSE offers a wide range of open-source applications, operating systems and cloud computing platforms, including SUSE Linux Enterprise Server, Cloud Application Platform, CaaS Platform and more.