SUSE Agrees “$600 Million” Deal to Buy Rancher Labs

“The first step in SUSE’s inorganic growth strategy”

German open source software firm SUSE has agreed to buy Kubernetes management platform provider Rancher Labs for a reported $600 million, the two revealed today, in an unexpected swoop on the Bay Area-based firm, which was founded in 2014.

“This combination is… a huge win for SUSE’s global partner ecosystem”, SUSE said, pledging to continue supporting multiple K8s distributions and operating systems.

The two expect the deal to close before October 2020.

SUSE — which was sold by Micro Focus for $2.5 billion to a subsidiary of private equity fund EQT in a deal that closed in 2019 — described the acquisition as the “first step” in a new inorganic growth strategy. Watch out for future acquisitions.

“This is an incredible moment for our industry, as two open source leaders are joining forces”, Melissa Di Donato, SUSE’s CEO said in a canned statement.

She added: “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”.

Like it or loathe it, Kubernetes has emerged the de factor container orchestration standard and central to the IT strategy of many large enterprises.

As SUSE notes in its release, Gartner predicts that growing adoption of cloud-native applications and infrastructure will increase use of container management to over 75{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} of large enterprises in mature economies by 2024 (up from less than 35{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} in 2020).

Rancher’s architecture supports any Cloud Native Computing Foundation-certified Kubernetes distribution including Google GKE, Amazon EKS, and Microsoft AKS.

More to follow