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SUSE Rancher gears up amid VMware-Broadcom 'feeding frenzy'

SUSE Rancher bolsters its bid to capture users dissatisfied with Broadcom's changes to VMware with the acquisition of StackState and other updates to its Prime package.

As fallout from the VMware-Broadcom merger shakes up the market for container-based platform engineering tools, SUSE has bolstered its pitch to enterprise businesses with an acquisition and recent additions to Rancher Prime.

Concerns about how Broadcom would manage VMware after its $69 billion acquisition came to fruition last year, as layoffs began at the company. The past six months have seen increased customer and partner angst about pricing changes and canceled reseller agreements.

VMware had been among the main contenders for enterprises interested in platform engineering, based on the company's VMware Cloud Foundation and Tanzu software product lines. VMware's dominance in virtualized servers means it will live on in many enterprise data centers, but its issues post-Broadcom merger will create new opportunities for other contenders in cloud-native platforms, according to industry analysts.

"The vast majority of organizations leaving VMware do so to obtain a new platform that they perceive as a better home for their cloud native applications," said Torsten Volk, an analyst at TechTarget's Enterprise Strategy Group. "At the same time … the high and often unpredictable cost of a purely hyperscaler-based cloud-native strategy [has] led to a bit of a feeding frenzy between hybrid cloud [players] such as Red Hat, Canonical, Pure Storage, Nutanix, Spectro Cloud, etc."

By executives' own admission last year, shortly after SUSE was taken private following disappointing revenue results, SUSE Rancher was challenged to make the transition from Kubernetes management to a broader platform engineering product.

Since then, with the release of Rancher Prime 3.0 in March and this week's acquisition of observability partner StackState, the company has strengthened its offering significantly, industry experts said. It added production-level support for Kubernetes Cluster API, which extended support for Kubernetes clusters built with any distribution of the container orchestration framework certified by the Cloud Native Computing Foundation (CNCF), as well as a newly generally available application catalog platform engineers can use to build self-service PaaS platforms. A new Rancher Prime product package included built-in integrations with SUSE's other cloud-native infrastructure automation tools, such as Harvester hyperconverged infrastructure and NeuVector container security.

"SUSE appears to be assembling a highly functional 'best-of-suite' style platform for modern cloud-native DevOps," said Andi Mann, global CTO and founder of Sageable, a tech advisory and consulting firm in Boulder, Colo."[It] could very well deliver the promise of platform engineering -- for Dev and Ops to build, deploy, host and run new innovation all on the same platform, with an integrated tool set across development and operations."

StackState screenshot of relationships between Kubernetes components and business applications
StackState, acquired this week by SUSE, automatically maps relationships between Kubernetes components and business applications.

SUSE Rancher tucks in StackState

StackState, a Dutch startup founded in 2015, already marketed an integration of its observability and remediation guidance tools with SUSE Rancher before the acquisition for an undisclosed sum this week. A SUSE blog post said StackState's observability software will become part of Rancher Prime, and StackState engineers will join SUSE to build further integrations with other parts of the container management platform, such as NeuVector and a newly launched SUSE AI strategy. StackState's software also correlates observability telemetry data with business and application-level metrics.

"StackState is a pretty small company, but I think it can serve well as an integrated, turnkey observability for some Rancher customers," said Gary Chen, an analyst at IDC. "Obviously, competing in the larger observability market is a taller order, but observability is such a critical capability today [that] there is more of an expectation of some built-in capability from platform vendors."

Mann agreed that StackState isn't the strongest observability player but said it could still be valuable for SUSE Rancher and enterprises looking to it for a fleshed-out platform engineering suite.

Observability is such a critical capability today [that] there is more of an expectation of some built-in capability from platform vendors.
Gary ChenAnalyst, IDC

"StackState lacks a lot of the integrations and partnerships of many bigger vendors, and much of the functionality of best-of-breed vendors," Mann said. "But they are very simpatico with SUSE in their culture and commitment to open source and cloud-native service management, and in their adoption and advancement of open technologies like OpenTelemetry and eBPF, so I definitely see it as a good fit."

Not every industry observer was convinced this was the right move, however.

"Observability is a head-scratcher to bring into the platform, as a number of [SUSE] partners in the CNCF ecosystem will now compete against [it] and double down with the likes of Red Hat," said Rob Strechay, lead analyst at enterprise tech media company TheCube Research.

SUSE Rancher checks off platform engineering to-dos

Red Hat is the most powerful competitor for SUSE Rancher in the race to capture VMware defectors, according to industry analysts. It remains a formidable opponent given its already-dominant market share for OpenShift in container platforms and parent company in IBM.

Red Hat OpenShift also builds in a variety of open source platform engineering features, including observability and container security with its Advanced Cluster Security product. It contains the same KubeVirt virtualization software that underpins SUSE's Harvester. And OpenShift now sits at the center of the IBM-Red Hat generative AI strategy with updates to its OpenShift AI platform rolled out at the Red Hat Summit in May.

SUSE has strengthened its competitiveness and been able to retain more customers since last year, according to Strechay, but overall, based on industry surveys by TheCube partner Enterprise Technology Research, "their growth has been lumpy. Their momentum has dropped pretty consistently since July of 2022," he said.

SUSE Rancher made other improvements to Rancher Prime this week during its SUSECon user event in Berlin, including Harvester 1.3.1, which the company's press release described as "a path to modernization, providing customers a transition from legacy VMware-based and other virtual machine workloads in favor of modern cloud native solutions."

Rancher Prime 3.1 supports virtual cluster provisioning, GPU resource optimization and support for Kubeflow AI workloads on Kubernetes. Integration with NeuVector Prime 5.4 deepened this week with embedded pod and node scan results, a compliance reporting framework and built-in distributed denial-of-service attack protections.

It's unlikely any one vendor will capture the entire disgruntled VMware customer base, especially for legacy applications unlikely to make the transition to cloud-native infrastructure, according to IDC's Chen.

But SUSE Rancher has bolstered its chances as a replacement in the cloud-native realm, he said.

"[Harvester] has flown under the radar mostly, but this might be the time for it to really [take] center stage," he said. "Harvester definitely has a more modern slant, so I think it's more appropriate for VMware workloads that can be modernized to some extent."

To truly compete with the likes of IBM and Red Hat, SUSE must also shift its sales approach to target enterprise upper management, added Stephen Elliot, an analyst at IDC.

"It's a hyper-competitive marketplace with many good product, pricing and platform choices," Elliot said. "[StackState] can help SUSE. … [But] now the company must invest in a stronger top-down leadership message … [to] answer the question of what a platform means to CIOs and CTOs -- what type of value it can deliver, how it makes other platforms better [and how] observability impacts problem, change and incident management processes."

Beth Pariseau, senior news writer for TechTarget Editorial, is an award-winning veteran of IT journalism covering DevOps. Have a tip? Email her or reach out @PariseauTT.

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