SUSE's Rancher Labs Acquisition Adds Kubernetes Management Depth

SUSE is moving to grow its Kubernetes business by acquiring enterprise Kubernetes management platform specialist Rancher Labs. The deal is reportedly worth $600 million.

The merger brings together two established open source vendors and deepens SUSE’s depth in the enterprise Kubernetes marketplace. The Rancher Labs platform lets users to deploy their containerized workloads anywhere, including the network edge and to the cloud.

Melissa Di Donato, SUSE’s CEO, told Channel Futures the move will benefit partners and customers with complementary products.

SUSE’s Melissa Di Donato

“Our vision to enable better futures and measurable value is what guides our decisions and drives our growth,” she said. “Rancher is 100% open source and equally as passionate as SUSE is about open source innovation, community empowerment and customer success.”

At the same time, the deal immediately beefs up SUSE’s Kubernetes management capabilities, said Di Donato.

“This acquisition enhances our ability to offer a more comprehensive portfolio, greater customer choice and no vendor lock-in,” she said.

The acquisition is also a “huge win” for SUSE’s global partners after the deal closes, she said.

“They will be able to provide an even broader range of solutions to customers with the addition of Rancher’s solutions,” said Di Donato.

Channel partners and customers have been asking SUSE to get more involved in Kubernetes management, said Di Donato.

“As IT leaders increasingly seek to leverage the cloud to innovate and drive digital transformation, Kubernetes has rapidly emerged as a core pillar of IT strategy,” she said.

Di Donato did not address a question about whether Rancher Labs and its products will keep their own names.

“Further plans will be announced after closing,” she said. “It is key for both SUSE and Rancher to preserve the brand equity of both companies.”

Future versions of SUSE’s container-as-a-service platform will be based on Rancher’s Kubernetes management capabilities, according to SUSE.

Expect the acquisition to close before the end of October.

Rancher’s infrastructure-agnostic architecture supports any Cloud Native Computing Foundation-certified Kubernetes distribution. That includes Google GKE, Amazon EKS and Microsoft AKS, as well as projects such as Gardener.

A Positive Move, Say Analysts

Charles King, principal analyst with Pund-IT, said the Rancher acquisition is a smart Kubernetes management move for SUSE.

Pund-IT’s Charles King

“The acquisition of Rancher Labs is a tactical value play that aims to ease and simplify the deployment and management of SUSE’s container solutions and services,” said King. “It’s likely faster and easier for SUSE to buy Rancher than it would be to develop solutions similar to those the company is well-known for. The deal is also a win for Rancher and its investors since the market for independent Kubernetes/container management is tightening; better to ally itself with a larger IT infrastructure player and take some profits in the process.”

The deal should make SUSE more competitive in containers and Kubernetes, said King.

“The deal is also reflective of the proactive efforts that we’ve seen at SUSE since the company began its strategic partnership with growth investor EQT in March 2019,” he said.

Another analyst, Arun Chandrasekaran of Gartner, agreed.

“The acquisition of Rancher provides SUSE with a stronger foothold in the container management software space,” he said. “The Rancher acquisition allows SUSE to support containerized workloads more effectively across on-premises, public cloud and edge environments.”