SUSE's Captain Container on sailing the open source seas

Peter Smails talks community, licensing, and AI pragmatism

Interview Open source companies do not run on goodwill alone – and industry veteran SUSE is walking the tight-rope between pleasing the community and charging cold hard cash for some of its wares.

Speaking to The Reg at Kubecon in Chicago, Peter Smails, the company's very own Captain Container, homes in on licensing, being pragmatic about AI, container libraries and updates to SUSE's Cloud Native product line.

The latest Rancher releases include Rancher Prime 2.0 for paying subscribers, and Rancher 2.8, a community edition. Both are now generally available, and illustrate the challenges faced by open source companies when it comes to monetizing their products. The former generates income, while the latter keeps the community on board.

Peter Smails, SUSE SVP, General Manager, Enterprise Container Management

SUSE's Peter Smails

Smails, a SUSE senior veep and general manager for enterprise container management, is unsurprisingly positive about customer acceptance of the subscription model. "It's been good," he says. "We're leading with the commercial offering – great – but in that same release, we're talking about what we're doing from a community standpoint.

"So we are continuing to drive adoption on the open source side, but we're continuing to double down, to focus on what we're doing with Prime."

Smails notes that customer retention is continuing to improve and puts this down to the maturity of the enterprise platform. An engineer could grab the code and build the binaries, but "if you want an integrated, turnkey platform that offers you all of the extensibility ... that becomes the difference."

SUSE has been around for a long time, and although Smails himself arrived with the Rancher acquisition, some may say the company has proven adept at functioning as a business while retaining open source roots.

However it's an interesting time in the open source world. We ask Smails about the reasons behind the changes in licensing seen at several open source vendors, including most recently Hashicorp. It's economic, he tells us. "Companies are, all of a sudden, finding out that if they want more money [and] they want to get invested in, they have to demonstrate how they make money.

"Open source is an amazing way to go to market ... you have a low barrier of entry, you create something ... you throw it out there ... you join CNCF ... it's a great way to drive adoption.

"But at the end of the day, you have to be able to add material value for people to pay for it. There's this tacit acknowledgment that it's getting harder for startup and open source companies to fund themselves."

There's this tacit acknowledgment that it's getting harder for startup and open source companies to fund themselves

Without naming names, Smails says some companies are starting to back away from open source in the traditional sense and adopt a more conservative stance. He reckons plenty of open source companies are out there with code that people use. However, "adoption," he said, "doesn't cut it anymore. It's getting tougher." Particularly when customers are expected to part with their cash for a service.

"At one end of the spectrum [people are saying] it's the death of open source ... and then there's the other end ..."

And where does SUSE sit? After noting that he did not necessarily adhere to the negative end of the spectrum, Smails says the company intends to invest wisely. "Prime is our primary platform (pun not intended) that we're going to be driving innovation around, because it's got to add value to the platform. Container management has become a big company game. It's become a big vendor game. I think it's hard to be a startup."

SUSE is far from a startup but has itself gone through ownership changes in the past decade: sold to Novell in 2003 for $210 million; Novell was then bought by Attachmate in 2011 for $2.2 billion; and Attachmate was sold to Micro Focus three years later for $2.3 billion. SUSE was subsequently sold to private equity house EQT in 2018 for a cool $2.5 billion.

In more recent twists, SUSE floated on the Frankfurt Stock Exchange in 2021, though EQT retained a majority shareholding. And as of August, SUSE was flipping back to full private ownership again, with a buyout offer of €16 per share versus the €30 at IPO.

Change is constant, and the advent of container orchestration seems a long time ago. More recent Kubecons have carried a distinctly corporate whiff yet this year's event was sprinkled with some magic AI dust.

SUSE seems to be deliberately cautious when it comes to AI. The Rancher announcements shy away from insisting that everything is infused AI. With Rancher Prime 2.0, the only place AI is showing up is as an assistant.

Smails tell us: "It's a very pragmatic approach. It's about enhancing the user experience and just helping them do more more efficiently."

"We have a great stack for running AI," he adds, "but that doesn't necessarily say that we're taking a position on exactly where AI is going to fit and where it's not."

Rancher 2.8 arrives in general availability with support for Kubernetes 1.27, a new self-service secure public API, and imprvement in GitOps workflows. However, the technical preview of the Rancher Prime Application Collection has Smails most excited.

The collection is a library of developer and infrastructure applications built with SUSE Linux Enterprise Base Container images. The theory goes that customers can quickly launch the applications with confidence that nothing nasty lurks under the hood.

Smails says there is an initial set of ten, but more will evolve over time. This is, after all, a technical preview.

"It's exciting," he says, "because we as the container team are leveraging the core technologies and capabilities of SUSE ... we're pulling the source, we're rebuilding it with the internal build system which has been used by SLES [SUSE's Enterprise Linux] for decades."

Smails describes the process as "rock solid," adding: "If you want to get zero trust, if you want to know your secure supply chain attestations, it's the place to go."

With private equity owners wanting their investment to pay off, and SUSE also trying to keep the open source network on side, the challenges facing the Linux veteran look here to stay. And that's not a bad thing. ®

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