SUSE’s rosy and containerized future, driven by open-source

A company whose products are "free" is making decent money? Can it be true?
22 September 2021 | 2 Shares

SUSE’s banking on a FOSS container future. Source: Shutterstock

German open-source technology company SUSE has announced its Q3 figures and has stated that it expects its full-year adjusted revenue to be in the top half of its guidance range — in short, the open-source giant is doing more than OK.

The figures show that some of SUSE’s fastest-growing markets are in North America (where Red Hat and Canonical are often seen as the default choices for server deployments), and especially in its Kubernetes deployment platform, Rancher. Containerized applications and services are increasingly being leveraged in production, and Rancher offers one of the most flexible and truly OS and cloud-agnostic platforms on which to create cloud-native services at scale, and make sure they keep firing on all cylinders even when needing to scale and turn on a dime.

Despite Kubernetes’s ability to run as a full-stack for production applications, many organizations continue to rely on virtual machines for the majority of their needs. Not everyone is 100% convinced about the suitability of containers in every setting — and regardless, the “if it ain’t broke, don’t fix it” mentality helps keep the status quo in many enterprises. In pure staff skill terms, however, that can create a distinction between VM deployment methodologies, orchestrated by vSphere or Nutanix, for example, and the new kids on the block with their shiny K8S lapel pins.

SUSE however has an answer for those IT departments finding themselves in this situation: the world’s only open-source HCI (hyperconverged infrastructure) management platform that leverages Kubernetes, KubeVirt, and Longhorn: Harvester. Its party trick is in its presentation: the fashionable K8S elements are not exposed to users — it’s all still about VMs and HCI for the IT manager in charge.

Harvester runs on bare metal server clusters (there’s a bootable .iso) and provides integrated virtualization and distributed storage, just like the HCI structures found in Nutanix shops, for example. However, under the hood, it’s KubeVirt not Libvirt, and Longhorn not vSAN HCI mesh.

Unlike Nutanix and VMware, Harvester is an open-source solution, so organizations won’t be looking at license tier costs, necessarily. And in many IT departments, there won’t be a need to send chosen sysadmins off for deep-dive K8S development, management, and deployment courses.

The open-source HCI solution probably shouldn’t be considered production-ready just yet, however. The quarterly figures presentation was careful to “introduce its engagement in a number of new open source projects” that included Harvester. Also name-checked were Epinio (compiles applications for K8S deployment), Opni (detects anomalies in logfiles), and Trento, a web console to manage fellow German giant SAP’s software.

What’s clear is that SUSE has its sights set very much on remaining fiercely open-source, and on a quest to get microservices into the enterprise. As an extension to that aim, the company statement announced its work on what it calls SUSE Edge — that is, containers in edge deployments. It’s developed technology specifically designed for low-spec hardware (like IIoT and IoT devices that run off a single board) from OS right up to container fleet management.

(TechHQ‘s Tech Means Business podcast has an upcoming episode where we discuss containerization and edge environments with SUSE — watch this space.)

The presentation also contained the official announcement of the release of SLES 15 (SUSE Linux Enterprise Server) Service Pack 3 and Rancher 2.6, a feature update for its recent acquisition that continues to go from strength to strength.

On a more mundane but critically important note, the company key financial “highlights” in the Q3 statement included:

  • Annual contract value grew 39% to US$119.0 million, and total annual recurring revenues grew 20% to US$555.5 million, with Rancher recording 115% growth in annual recurring revenue.
  • Adjusted Cash EBITDA (pre-tax earnings) was US$55 million, an increase of 84% and a margin of 43%.
  • In May 2021, SUSE was listed on the Frankfurt Stock Exchange.
  • Net debt at quarter-end was US$653.1 million, representing a reduced leverage ratio of 2.6x.