The acquisition of Kubernetes management platform provider Rancher Labs in late 2020 marked a key step in the evolution of SUSE’s market strategy from selling their Linux OS to selling a full solution stack around it.
Open source Linux software company SUSE has been around three decades, and has gone through multiple changes of ownership and structure over that time. For the vast majority of this period though, the company’s route to market was primarily oriented around selling their Linux OS to OEM buyers. Now, however, because of the changing trends in the IT economy, the company has rethought its role in the market, taking more of a full stack, solution-centred approach. It has reworked its Go-to-Market program, and its channel program for enablement, to suit that new perspective. The company is pleased with the results since the major Go-to-Market changes were implemented last fall.
The overarching changes in SUSE’s ownership structure are likely more familiar to most than the strategic shifts underneath. After five years as part of MicroFocus, which had acquired SUSE through its merger with Attachmate, SUSE was sold to a subsidiary of EQT partners in March 2019, and re-established as a separate company. They changed their CEO shortly after, bringing in former SAP COO Melissa Di Donato in July 2019. SUSE then went public in May 2021.
The acquisition in December 2020 of Kubernetes management platform provider Rancher Labs, however, provides a key insight into the shift in the company’s strategy.
“As part of the whole process of change where SUSE became independent again, we also went through a stage where we looked at how to evolve the product portfolio,” said Rachel Cassidy, Senior Vice President Global Channel and Cloud at SUSE. “The big IHVs [independent hardware vendors] who had been our main customers were evolving their business models anyway, towards as an-a-service model, and this was amplified further by COVID. Companies like HPE and Dell made major changes to their business models because they believed non-traditional approaches were necessary to survive.”
SUSE made changes to their portfolio to adjust to the evolving new reality.
“With the IHVs moving towards as-a-service, we moved away from our old royalty-based approach with focused on sales of our OS,” Cassidy indicated. “We tweaked our portfolio, and the acquisition of Rancher was an important part of this. While our OS was core to everything we did, Rancher was a very service solution-oriented offering. Rancher amplified our strategy of innovation.”
The key component of this change was building full stack solutions, which SUSE had not focused on in the past.
‘Rancher helped us build out our portfolio stack, and take more of a Line of Business Solution orientation,” Cassidy said. “It enables us to build up the stack. It also involves a major change in how we go to market. Our Line of Business focus expands the type of partner that we go to market with. We are building out a partner ecosystem beyond our traditional OS-focused partners. While historically, we had programs for many partners, with our new offerings we can accelerate and work more effectively with a much broader range of partners.”
This led to the launch last September of the SUSE One Partner Program, at the Digital SUSE Partner Summit 2020. The old program, which long preceded Cassidy’s arrival at SUSE in 2019, was very siloed around specific partner types.
“There were 15 separate programs, all siloed by partner type,” she said. “Some originally came out of engineering, some originally out of sales, and none of them were aligned. It was all very focused on separate routes to market and had antiquated deal registration.”
The new SUSE One Partner Program changed the focus from route to market to specializations, where partners can move into specializations depending how their Go-To-Market strategy has evolved. That lets, for example, a reseller who has gotten into services or managed services select appropriate specializations.
“We took feedback from partners, and based on that, we created a framework to work across all the old programs, so the new framework is now holistic, with the flexibility to evolve it to a changing partner ecosystem,” Cassidy said.
“We still have our traditional partner base – mainly IHVs and resellers, but we are now doing exciting things with ISVs, and being white labelled into their offerings,” she noted. “Other new partners are SIs and regional SIs and boutiques. Besides our SAP focus, we didn’t have regional SIs beyond where an OS may be relevant.”
Status in the old programs was all grandfathered.
“A lot of these changes didn’t happen overnight, and version one of the new program wasn’t all-in, so we protected everyone’s status,” Cassidy said. “The deal registration, the new portal, and a new Learning Management System were all part of the 1.0 program, release, but we have uplifted both investments and enablement for partners since then.
“For example, we used to do rebates after the fact with deal registration,” she stated. “Now we do discounts by tier up front while protecting the opportunities. That took a lot of internal selling to our internal team, because it was a direct change for them, but it changed the relationship with the partners from transactional to strategic.”
Since the program was put in place, last fall, Cassidy said they have seen a major surge in partner business.
“It took a quarter and a half to show impact, but sine then we have seen an uplift in pipeline development, by an order of magnitude,” she stressed.
Cassidy emphasized that SUSE’s transformation as a business has fundamentally changed its partner relationships as well.
“SUSE is a new company,” she said. “It’s now very partner-centric. A lot of times, organizations have a partner strategy, but its not truly a part of their strategy for scale and growth. Ours is, and we want our partners to join us on that journey.”