SUSE To Acquire Rancher Labs, Becoming A Market Leader In Enterprise Kubernetes Management

Establishes SUSE and Rancher Labs as the open source innovator of choice for Enterprise Linux, Kubernetes, Edge Computing and AI

SUSE, the world’s largest independent open source company, has entered into a definitive agreement to acquire Rancher Labs. Based in Cupertino, Calif., Rancher is a privately held open source company, providing a market leading Kubernetes Management platform.

“This is an incredible moment for our industry, as two open source leaders are joining forces. The merger of a leader in Enterprise Linux, Edge Computing and AI with a leader in Enterprise Kubernetes Management will disrupt the market to help customers accelerate their digital transformation journeys,” said Melissa Di Donato, SUSE CEO. “Only the combination of SUSE and Rancher will have the depth of a globally supported and 100% true open source portfolio, including cloud native technologies, to help our customers seamlessly innovate across their business from the edge to the core to the cloud.”

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Unleashing Cloud Native Futures for Customers and Partners

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. Gartner predicts that growing adoption of cloud-native applications and infrastructure will increase use of container management to over 75% of large enterprises in mature economies by 2024 (up from less than 35% in 2020).

SUSE, a leader in Enterprise Linux, Edge Computing and AI, and Rancher, a leader in Kubernetes Container Management, will deliver computing everywhere with the latest AI and seamless deployment of containerized workloads from the edge to the core to the cloud.

“Rancher and SUSE will help organizations control their cloud native futures,” said Sheng Liang, Rancher CEO. “Our leading Kubernetes platform with SUSE’s broad open source software solutions creates a powerful combination, enabling IT and Operations leaders worldwide to best meet the needs of their customers wherever they are on their digital transformation journey from the data center to cloud to edge.”

Following regulatory approvals and the acquisition’s close, customers of both companies will benefit from a broader best-in-class portfolio as well as from the vastly increased global presence and innovation power. SUSE customers will benefit from the robust capabilities of Rancher’s industry leading cloud native technologies, named by Forrester Wave^TMas a leader in Enterprise Container Platform Software. Rancher’s customers will on the other hand gain access to SUSE’s global support network and broad open source portfolio.

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This combination is also a huge win for SUSE’s global partner ecosystem who will now be able to provide an even broader range of solutions to their customers with Rancher’s solutions.

Unwavering Commitment to the Open Source Community

With its heritage in open source technology, SUSE remains committed to delivering 100% true open source technologies with no vendor lock-in. Sharing this ethos, Rancher will continue its strategy to be open and support multiple Kubernetes distributions and operating systems.

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

First Step in SUSE’s Inorganic Growth Strategy

The acquisition of Rancher is the first step in SUSE’s inorganic growth strategy since becoming a fully independent software company in March 2019. It also follows SUSE’s strong fiscal momentum – most recently with SUSE reporting an excellent second quarter of its fiscal year 2020, which saw ACV (annual contract value) bookings increase 30% year over year and global cloud revenue skyrocket 70% year over year.

“Our vision to enable better futures and measurable value for our customers and partners is what guides our decisions and drives our growth,” added Di Donato. “This acquisition enhances our ability to offer a more comprehensive portfolio, greater customer choice and no vendor lock-in. It will also enable us to play an even more strategic role with cloud service providers, independent hardware vendors, systems integrators and value-added resellers who are eager to provide greater customer experiences.”

The deal is expected to close before the end of October 2020, subject to customary closing conditions including receipt of regulatory approvals.

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