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SUSE acquires Rancher Labs to compete with Red Hat OpenShift

SUSE acquires Rancher Labs to compete with Red Hat OpenShift

The SUSE Group is one of the largest open-source enterprises, and it completed the acquisition of Rancher Labs, a Kubernetes management startup. The deal will allow SUSE to compete with its rival, IBM’s Red Hat, in the ever-growing Kubernetes market.

SUSE also has a plan to double its revenue in a couple of years. The acquisition of Rancher Labs will help with that.

SUSE is based in Germany and is the company behind one of Linux’s most widely used enterprise distributions. The SUSE Linux distribution is used in enterprise public cloud deployments, edge systems, and private data centers. 

The financial terms of the deal, which was first announced in July, have not been disclosed. The reported figures are rumoured to be somewhere between $600 million to $700 million.

The prize that is Rancher Labs

The company also sells products of more significance, like container management tooling. Rancher Labs created a platform that companies with large Kubernetes environments can use to set up and manage their environments.

Kubernetes is open-source software used to manage large numbers of containers, where components of modern software apps are hosted.

Rancher makes revenue by providing professional services and support for enterprises. The company also says that its platform is employed by 30,000 engineering teams worldwide to power Kubernetes containers deployment.

A level-playing field

The acquisition is an excellent way for SUSE to challenge Red Hat’s OpenShift platform, also built for the Kubernetes management space. Red Hat and SUSE are rivals because Red Hat makes a very popular open-source Linux distribution used by enterprises.

However, in recent years, Red Hat has gained more footing than SUSE after focusing a lot of its attention on Kubernetes. 

The purchase of Rancher Labs will allow SUSE to get into the market with a ready-made Kubernetes management platform.

Related: Red Hat feels unbeatable with OpenShift under the wing of IBM