SUSE To Buy Container-Tech Standout Rancher Labs

With the acquisition of the Cupertino-based startup, the Linux powerhouse aims for a stronger foothold in the all-important Kubernetes market that’s increasingly crowded by industry giants.

Linux powerhouse SUSE said Wednesday it’s agreed to buy Rancher Labs, an innovative container-tech startup that’s a force in the all-important Kubernetes market.

SUSE described the deal, at an undisclosed price, as “the first step” in an inorganic growth strategy the company unleashed after it was sold by Micro Focus to a Swedish private equity firm for $2.54 billion in 2019, making it once again functionally independent.

Since then, SUSE has been looking to compete more aggressively in the cloud-native infrastructure arena by asserting itself as a Kubernetes vendor. The German company expects Rancher, based in Cupertino, Calif., will deliver the firepower needed to leverage its Linux prowess to seize greater market share.

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“Rancher is the most widely used enterprise Kubernetes platform,” Rancher Labs CEO Sheng Liang said in a blog post announcing the deal.

The startup’s open source software has been downloaded 100 million times, and Rancher has more than 37,000 active users.

“By combining Rancher and SUSE, we not only gain massive engineering resources to further strengthen our market-leading product, we are also able to preserve our unique 100% open source business model,” Liang said.

Rancher Labs was founded in 2014 in the then-nascent Docker ecosystem as a manager of container orchestrated workloads. For its first few years, Rancher’s platform was agnostic to the underlying container orchestrator, supporting Docker Swarm and Mesos, two Kubernetes rival technologies.

By 2017, Liang concluded Kubernetes had “clearly won the orchestration battle,” he told CRN at the time.

His startup released Rancher 2.0, the first version of its platform that went all-in on Kubernetes with an architecture supporting all Cloud Native Computing Foundation-certified distributions, including the managed Kubernetes services offered by the hyper-scale cloud giants.

“We started Rancher 6 years ago to develop the next generation enterprise computing platform built on a relatively new technology called containers. We could not have anticipated the tremendous growth and popularity of the Kubernetes technology,” Liang said.

Since committing exclusively to Kubernetes, Rancher has delivered innovative solutions, like the lightweight K3s distribution for resource-constrained edge environments, and a Kubernetes deployment engine called Rio.

SUSE, founded in 1992, has been building out its portfolio into a broader array of software-defined infrastructure and application delivery solutions, as well as edge computing and AI, as it looks to assert itself in the wake of Red Hat’s acquisition by IBM as the largest independent open-source company focused on cloud-native solutions.

In early 2017, SUSE bought HPE's OpenStack and Cloud Foundry assets and leveraged them to launch its Cloud Application Platform that also incorporated Kubernetes.

After the acquisition closes, which SUSE expects to happen by October, Liang will lead SUSE’s combined engineering and innovation organization.

“You can expect an accelerated pace of product innovation. And given SUSE’s 28-year history building a highly successful open source business, our commitment to open source will remain strong,” Liang said.

“SUSE’s global reach and enterprise focus will further strengthen our commitment to customers who rely on Rancher to power mission-critical workloads. Likewise, SUSE’s strong ecosystem will greatly accelerate Rancher’s on-going efforts to transform how organizations adopt cloud native technology,” Liang said.

It’s not the first time Liang, credited for leading a team that developed the Java virtual machine during his tenure at Sun Microsystems, has sold a startup.

He was a co-founder of Teros, a Web application firewall developer bought by Citrix Systems in 2005. Liang went on to found Cloud.com, a cloud infrastructure developer he ran as CEO before selling again to Citrix in 2011.

In a statement, SUSE said the acquisition of Rancher is “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.”

Kubernetes has become standard infrastructure for supporting cloud-native applications, but the market has crowded with name-brand industry giants leveraging the technology to deliver hybrid solutions.

Red Hat, a long-standing Linux competitor to SUSE, has emerged as a Kubernetes leader with its OpenShift platform. Google is making waves in the hybrid market with Anthos, as is VMware with its Tanzu portfolio. HPE also recently made the Kubernetes plunge with HPE Container Platform 5.0.