SUSE Positioned Well in Cloud, Open Source Markets, Analysts Say

The company's recent independence might point to continuing success in serving customers.

Todd R. Weiss

April 5, 2019

4 Min Read
Cloud Computing

SUSECON — Since its founding in 1992, Linux and open-source software vendor SUSE has morphed with the times, moving from being solely a Linux operating system company into being an operating system vendor as well as a provider of cloud, application, OpenStack platforms and more.

Here at the company’s annual SUSEcon user conference in Nashville, several IT analysts spoke to Channel Futures about the company’s journey and what it offers today to customers and partners.

In March, SUSE’s acquisition by investment company EQT Partners was finalized, ending its previous ownership by Micro Focus and making the company again an independent business. Company executives lauded that independence at SUSEcon this week as they unveiled several new products and pointed to a brighter future as a business.

Jennifer Thomson, an analyst with IDC, said she sees SUSE being on a good path, along with having a sold channel strategy. Most of the company’s business is done through its global channel relationships.


IDC’s Jennifer Thomson

“They have an opportunity in the market with public cloud and they seem to be working in that direction,” said Thomson. “They have the opportunity to seriously bring developers and operations together. They are empowering operations to get closer to developers by giving them the tools for true CI/CD workflows. And they play to the operations team with their products and from an applications standpoint.”

James Staten, an analyst with Forrester Research, said that SUSE has for years been open-sourcing its technologies, which is today seen as a given by a wide range of companies.

“One of the biggest values of open source is ecosystem empowerment” by opening one’s code and giving it an opportunity to grow with input from larger communities, he said. “It allows you to empower your ecosystem and apply it across whole industries. If you think doing something proprietary is going to protect you in the market, be prepared for your technology to be limited in the market.”

For SUSE, that has long been an important part of its success for its partners, said Staten.

“We need to start viewing SUSE not as something partners resell but as a platform that partners can extend as their own,” he said. “Dell and HPE are struggling with their software and their delivery of SaaS services because they are not viewed as software companies and are not prepared to provide it. If they instead looked at the platforms they deliver and extended the software, then customers would see the value of that.”

Channel partners can enrich their value to their customers by more deeply using open source to serve the IT needs of their customers, said Staten.


Gartner’s Tony Iams

Another analyst, Tony Iams of Gartner, told Channel Futures that SUSE continues to have deep and helpful relationships within the open-source community, which it built over several decades.

“That is a real asset and I think one of their greatest strengths,” said Iams. “Not much has changed in those relationships between SUSE and its customers, even through the various company ownership changes over the last 20 years. And I don’t expect much to change in those relationships in the future.”

The company is successfully embracing key things in the industry that are driving growth, including Kubernetes, said Iams, which is contributing to its business growth and maturity. The announcement this week by SUSE that it has been designated a Kubernetes Certified Service Provider (KCSP) by the Kubernetes project is an important achievement for the company, he said.

“SUSE getting that certification in Kubernetes is their most important initiative to continue to drive growth,” he said.

Under its new investor and out from under the thumb of previous owners, SUSE now has …

… new opportunities open for the company, said Iams. “Their agenda is no longer driven from the outside. Their investor has given them the mandate to grow so their strategy is going to change.”

Al Gillen, another IDC analyst, said that independent or not, SUSE still has plenty of competition from open-source market leader Red Hat, which is being acquired by IBM later this year if plans continue to progress. SUSE’s annual $300 million in revenue is just one-tenth that of Red Hat, which had revenue of $3 billion in fiscal year 2018.

“I don’t think that Red Hat is going away and I don’t think that the acquisition by IBM will make Red Hat less competitive,” said Gillen. “The landscape is shifting between both companies. In the past, success was measured by vendor A outselling vendor B. That’s not necessarily the metric that will work in the future.”

Instead of just sales metrics of the past, today success is also measured by the quality of competing platforms and with that SUSE definitely offers healthy competition, he said.

“Red Hat has a more complete platform today, but in the future the dimensions are going to change quite a bit,” said Gillen. “SUSE is powered to make acquisitions and Red Hat has the IBM parent company to draw technology from. One year from now I suspect both companies’ product portfolios will look different. There’s lots happening in the next 12 months.”

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About the Author(s)

Todd R. Weiss

Todd R. Weiss is an award-winning technology journalist who covers open source and Linux, cloud service providers, cloud computing, virtualization, containers and microservices, mobile devices, security, enterprise applications, enterprise IT, software development and QA, IoT and more. He has worked previously as a staff writer for Computerworld and, covering a wide variety of IT beats. He spends his spare time working on a book about an unheralded member of the 1957 Milwaukee Braves, watching classic Humphrey Bogart movies and collecting toy taxis from around the world.

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