SUSE’s Rancher acquisition brings containerization support

SUSE’s acquisition of Rancher Labs puts the Germany-based open-source software company in a much stronger position to offer flexible, edge-based services to its customers, according to an analyst at IDC.

The deal—which was originally announced this summer—essentially makes Rancher Labs into SUSE’s containerization “innovation center,” said IDC research director Gary Chen. Any customer working on digital transformation and rapid development is likely to appreciate the improved support for containerization—letting workloads function on whatever hardware is handy, and communicate across different arrangements of edge, cloud and local computing.

Terms of the deal were not publicly disclosed, but a CNBC report published after the initial announcement quoted sources familiar with the deal as saying that SUSE is paying between $600 million and $700 million.

The acquisition also improves SUSE’s mindshare among enterprise customers, many of whom might not have realized that the company even had Kubernetes-based offerings, said Chen.

“One [customer being targeted] is the SUSE admin who’s transitioning into the new world of containers and devops and such, and a lot of the new cloud-native stuff. It’s a transition that a lot of different companies are making,” he said. “Their businesses other than Linux were modest, so the Rancher acquisition injects a lot of adrenaline into that.”

SUSE has said that the company’s container-as-a-service platform will change heavily to accommodate new technology from Rancher Labs,

The key here is flexibility. Kubernetes, which is open-source, is designed to be an easy way to seamlessly manage an application framework that might be running multiple services in multiple places at once. Rancher is widely known as one of the main innovators in Kubernetes, and its key value-add is the ability to manage different deployments of the framework at scale.

What that means, precisely, varies among verticals, though Chen said that finance and media are potentially ripe targets for the new SUSE. Replacing older back-end applications with flexible newer ones is a core use case for advanced containerization – allowing legacy management applications to run in a much wider variety of environments, for example.

Any instance in which a company would want to run a new app that needs a lot of updates and has to run in multiple places is a good choice for containerization, according to Chen, and Rancher Labs is at the forefront of management frameworks that make this goal easy to achieve.

“SUSE being a very traditional Linux company in a container world, having that sort of attitude is a fresh approach for them,” he said. “It’s a very hot space. People who have a significant footprint of Kubernetes across different environments, I think that solution would be very appealing to them.”