SUSE is one of the trinities of the Linux world which comprises Canonical, Red Hat and SUSE. As a top contributor to many open source projects, SUSE is also one of the champions of the open source world:. I sat down with Nils Brauckmann, the President and General Manager of SUSE, at SUSECon 2015 to talk about SUSE, its strengths, and its plans for the future.
Swapnil: SUSE is older than Red Hat!
Nils: SUSE started in 1992 in Nuremberg, Germany, and we just celebrated our 23rd anniversary. And you know that SUSE is one of the open source and Linux pioneers. The open source development model appeared with Linux in 1991, just a year before SUSE was started. We have a lot of experience and knowledge in that area.
Swapnil: SUSE has been through a lot in all these years. For example, you have been through some acquisitions and mergers; in fact, SUSE was recently acquired by Mirco Focus as part of Attachmate. What's in the DNA of SUSE that makes it so reliant and strong that it keeps coming back?
Nils: The verdict, at the end of the day, that allows you to be in the market, to be stable and growing comes from customer and partner choice. It's not just your own will, but it's also actually dictated by customer choice. Customers and partners continue to engage with us, sign contracts with us, buy our services and solutions, and there is a reason for that. Certainly the reason is that in all these years we have proven to deliver excellent quality. That's really true. Our solutions, services and support are absolutely of high quality. So customers and partners know they can rely on SUSE solutions to really put their enterprise workloads, their mission-critical workloads, on SUSE and achieve great results. They know that we are very open as a business; we are very committed to open source and openness -- open APIs and interfaces; we are very much committed to different kinds of industry partnerships to develop best-of-breed solutions. And I think all those attributes are welcomed both by the enterprise customers and alliance and technology partners. And for that reason, even if there is ownership change, they want to continue to work with us.
Swapnil: After the acquisition by Micro Focus what's the health of SUSE?
Nils: The acquisition of the Attachmate group by Micro Focus -- and SUSE was part of it -- was in many ways good for SUSE. First of all, when the acquisition was finalized in November last year, I publicly said that we had an agreement with the Micro Focus CEO that for SUSE, to a large degree, it would mean business continuity. All the things that make us strong: our commitment to open source, our commitment to quality, our commitment to enterprise customers (mission-critical workloads, heterogeneous environment), we will continue to do all of that.
The management team that led SUSE at Attachmate is still intact. I am on board along with my core leadership team: Michael Miller, Ralf Flaxa, Ronald de Jong and Edwin Bowman.
We continue to go to market as the 'Green Team.' We continue to use the SUSE brand. All of that has remained exactly the same. The thing that has changed is that we have increased the expense budget; we have increased the investment into the SUSE business. Our business grew in billings by more than 25 percent. The investment in operational budget grew by more than 36 percent. So we are infusing more dollars into the business to make it more competitive. And these are actually decisions of the Micro Focus Group CEO. He allows me to invest dollars into SUSE because we're growing. He also allows me to keep the profit contribution margin at a level that enables me to infuse more money into the business. And that is more than we had in the past. That's a positive change going forward.
Swapnil: What are the areas where you are investing? If we look at the market, it's transforming from server-client to cloud-mobile. So what is your strategy for cloud?
Nils: That requires a more-specific answer.
The 36 percent of net additional dollars we can spend, to a large degree, goes into people. No surprise there because what we do is very people intensive. We actually opened new positions so that at the end of fiscal year 2016 our staffing will be 26 percent larger than it has been before. We are bringing a lot of new people into the business.
You may be asking yourself, “In what areas do these people work?” To a large extent we have increased engineering investment because we want to be more active in strengthening our existing solutions; we want to be more innovative for our solution portfolios. Then the rest of the money goes to sales, marketing, service and support because if you grow as a business you have more customers you want to deal with, you have more customers that you need to support. You want to find more customers around the world, so we invest not just in engineering but also in marketing.
But I think your question really points in the engineering and product direction. So let's break it down even further.
Enterprise Linux is a very mature and stable product but there is still growth in the market, there are companies that deploy Linux as an operating system either to power their cloud infrastructure or as the underlying operating system for big data implementations, big data analytics. So we invest a lot into Enterprise Linux; we want to keep that product competitive. There are things like containers and Docker that need to be supported on the operating system. So we invest in all those areas to strengthen Enterprise Linux.
Let's say a little less than 50 percent of our engineering investment goes into Enterprise Linux. A little bit more than 50 percent goes into OpenStack Cloud and Enterprise Storage because these are the newest solutions that we want to advance and accelerate in the marketplace.
We recently announced the new version of SUSE OpenStack Cloud, which will be released soon -- SUSE OpenStack Cloud 6 is now in beta. We are innovating in the areas that matter to enterprise customers -- high availability on the control node and on the compute node. We have invested in creating an upgrade path so if enterprise customers want to move to a new version of OpenStack they don't have to replace and rebuild; they can now do a normal upgrade from an older version of OpenStack cloud to a newer version. What it means is that they can easily move with OpenStack innovation. This is unique to us. Many enterprise customers are used to a mature upgrade path, but OpenStack doesn't offer that. You have to rebuild your cloud. SUSE is the first and only provider to offer an uninterrupted upgrade path to new versions, starting with SUSE OpenStack Cloud 6. So we are investing in many areas there, as well.
Swapnil: What about storage?
Nils: The same is true for enterprise storage. We have announced our second version, SUSE Enterprise Storage 2, which supports iSCSI for heterogeneous storage on different storage nodes. Customers can run whatever they want: Linux, UNIX or Windows. And we are the first to offer this in the market. So that's real innovation and that's the result of our investment in engineering.
So we invest in enterprise Linux but also in new areas such as SUSE OpenStack Cloud and SUSE Enterprise Storage. That's where the majority of our investment goes.
Swapnil: Will you be making any acquisitions to add more products to your portfolio, as your competitor Red Hat is acquiring companies?
Nils: We first have to acknowledge the fundamental difference that may exist in the market. Our strategy is to focus on our core competencies, and our core competencies are Enterprise Linux, cloud infrastructure -- OpenStack -- and software-defined storage. We don't have a strategy to build in every case a complete stack that is made of SUSE-only solutions. And that's what makes us different from other players that operate in the market. We have our core competency. And then we work together with all kinds of technology partners and make sure that our solutions are optimized to support their solutions in an enterprise context.
It's more like a best-of-breed, freedom-of-choice approach; a true open source approach. There might be other players in the market -- both closed-source as well as open source -- whose strategy is to create their own stack from top to bottom. Then they go to their customers and say "you have to use my stack." That's more like a vendor lock-in into their own stack. That is not SUSE's strategy. We do what we do best -- our core competencies -- and then we engage in partnerships to customize, optimize, to make a solution which is best of breed for our customers to consume. That's why we are so strong with other partners like SAP and other ISVs.
Swapnil: So far SUSE hasn't had an equivalent of CentOS or Ubuntu. These distros don't bring any revenues for Red Hat and Canonical but they do create mindshare. I know openSUSE is moving in that direction with Leap, but is SUSE suffering because of the lack of a similar solution?
Nils: It may be a funny response to your question but we don't feel that we suffer. Why? Because we are growing.
SUSE, as a business, is adding new customers. We are selling more. We are broadening our product portfolio. We are hiring people. So I don't actually think in terms of suffering because my business is vibrant and thriving and growing.