 From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. Hi, I'm Stu Miniman coming to you from our Boston area studio and this is a special CUBE Conversation. I always love talking to startups around the industry, understanding how they're creating innovation, doing new things out there. And oftentimes, one of the exits for those companies is they do get acquired. And happy to welcome back to the program one of our CUBE alumni, Shang Liang. He is the co-founder and CEO of Rancher. Today, there was an announcement for a definitive acquisition of SUSE, who our audience will know well, we wrote SUSECon. So Shang, first of all, thank you for joining us and congratulations to you and the team on joining SUSE here in the near future. Thank you Stu, I'm glad to be here. All right, so Shang, give our audience a little bit of context. So I've known Rancher since the very early days. I knew Rancher before, most people had heard the word Kubernetes. It was about containerization. It was about helping customers. It was that Cattles versus Pets. So that Rancher analogy was, hey, we're gonna be your Rancher and help you deal with that sprawl and all of those pieces out there where you don't wanna know them by name and the like. So help us understand how what was announced today is meeting along the journey that you set out for with Rancher. Absolutely, so SUSE is the largest independent open-source software company in the world and their leader in enterprise Linux. Today they announced they have signed a definitive agreement to acquire Rancher. So we started Rancher about six years ago as Stu said to really build the next generation enterprise compute platform. And in the beginning we thought we're gonna just based on our technology based on Docker containers. But pretty soon Kubernetes was just clearly becoming an industry standard. So Rancher actually became the most widely used enterprise Kubernetes platform. So really with the combination of Rancher and SUSE are going forward, we're going to be able to supply the enterprise container platform of choice for lots and lots of customers out there. Yeah, just for our audience that might not be as familiar with Rancher, why don't you give us your positioning of where we are with the Kubernetes landscape. They've talked about many times in theCUBE a few years ago. It was all about, hey, are we going to have some distribution war? Rancher has an option in that space, but today it's multi-cloud. Rancher works with all of the cloud Kubernetes versions. So what is it that Rancher does uniquely? And of course, as you mentioned, open source is a key piece of what you're doing. Exactly, Stu, thanks for the question. So this is really a good lead having to describing what Rancher does and some of the industry dynamics and the great opportunity we see with SUSE. So many of you I'm sure have heard about Kubernetes. So Kubernetes is this container orchestration platform that basically works everywhere. And you can deploy all kinds of applications and run these applications through Kubernetes. It doesn't really matter fundamentally what infrastructure you use anymore. So the great thing about Kubernetes is whether you deploy your apps on AWS or on Azure or on premise bare metal or vSphere clusters or out there in IoT gateways and 5G base stations and surveillance cameras, literally everywhere Kubernetes will run. So in our world, I like to think about Kubernetes as the standard for compute. If you kind of make the analogy, what's the standard of networking that's TCPIP? So networking used to be very different. You used in the decades ago, there used to be different kinds of networking. And at best you had like a local area network for a small number of computers to talk to each other. But today with TCPIP as a standard, we have internet, right? We have Cisco, we have Google, we have Amazon. So I really think as successful as cloud computing has been and how much impact it has had to actually push digital transformation and app modernization forward, a lot of organizations are kind of stuck between their desire to take advantage of a cloud provider, one specific cloud provider, alls and bells and whistles versus any cloud provider just doesn't, not a single cloud provider can actually supply infrastructure for everything that a large enterprise would need. You know, you may be in a country, you may be in some remote locations, you might be in your own private data center. So the market really, really demands a standard form of compute infrastructure and that turned out to be Kubernetes. That is the true. Kubernetes started as sort of a way Google internally ran their containers, but what it really hit the stride was a couple years ago, people started to realize, for once compute could be standardized and that's where Rancher came in. Rancher is a Kubernetes management platform. We help organizations tie together all of their Kubernetes clusters regardless where they are. And you can see this is a very natural evolution of organizations who embark on this Kubernetes journey and by definition, Rancher has to be open because this is such a strategic piece of software who would want, you know, sort of their single point of control for all compute to be actually closed and proprietary. Rancher is 100% open source and not only that, Rancher works with everyone. It really doesn't matter who implements Kubernetes for you. I mean, Rancher could implement Kubernetes for you. We have a Kubernetes destroyer as well. We actually have a, we're particularly well known for Kubernetes destroyer designed for resource constrained deployments on the edge called K3S. Some of you might have heard about it, but really we don't care. I mean, we work with upstream Kubernetes destroyer, any CNCF compliant Kubernetes destroyer or one of many, many popular or the popular cloud hosted Kubernetes services like EKS, GKE, AKS. And with Rancher, enterprise can start to treat all of these Kubernetes clusters as fungible resources, as caters. So that is basically our vision. And they can focus on modernizing their application, running their application reliably. And that's really what Rancher is about. Okay, so Shang, you know, being acquired by SUSE, I'd like to hear a little bit, you know, what does this mean for the product? What does it mean for your customers? What does it mean for you personally? According to CrunchBase, you'd raised $95 million, as you said, over the six years. It's reported by CNBC that the acquisitions and the ballpark of 600 to 700 million. So that would be about a 6x increment over what was invested. Not sure if you can comment on the finances and would love to hear what this means going forward for Rancher and its ecosystem. Yeah, actually, I know there's tons of rumors going around, but the acquisition price, SUSE has decided not to disclose the acquisition price. So I'm not going to comment on that. Rancher has been a very cash efficient business. I mean, there's been no shortage of funding, but even amongst the $95 million we raised, we really haven't spent majority of it. We probably spent, you know, just about a third of the money we raised. In fact, our last round of fund raise was just three, four months ago. It was a $40 million series D, and we didn't even need that. I mean, we could have just continued with the series C money that we raised a couple of years ago, which we barely started spending either. So the great thing about Rancher's business is because we're such a product driven company, you know, with open source software, you develop a unique product that actually solves a real problem. And then there's just no barrier to adoption. So this stuff just spreads organically, people download and install, and then they put it in mission critical production. Then they seek us out for commercial subscription. And the main value there, they're getting out of commercial subscription is really the confidence that they can actually rely on the software to power their mission critical workload. So Wednesday, you know, Wednesday really start using Rancher, they recognize the Rancher as an organization provide. So this business model has worked out really well for us. The vast majority of our inbound leads, vast majority of our deals are based on inbound leads, and then that's why we've been so efficient. And that's, I think one of the things that really attracted Sousa as well. It's just these days you don't just want a business that you have to do heavy weight, heavy duty, you know, old fashioned enterprise cycle because that's really expensive. And when so much of that value is kind of built into some kind of a bundling or locking sooner or later, customers know better, right? And they want to get away. So we really wanted to provide a open source and open more important than open source is actually open. A lot of people don't realize there are actually lots of open source software even in the market that are not really quite open that might seem like a contradiction, but you can have open source software which you eventually package it in a way like you don't even make the source code available easily, you don't make it easy to rebuild, you know, the stuff. So Rancher is truly open and open source. People just download open source software, run it and the day they need it, our enterprise subscription we will support it. They don't, the day they don't need it, they'll actually continue to run that the same piece of software. And we'd be happy to continue to provide them with patches and security fixes. So it's a, as an organization, we really have to provide that continuous value. And it's, it worked out really well because this is such a important piece of software. SUSE has this model that I saw on their website and it really appeals to us. It's called the power of many. So SUSE turns out they not only completely understand and buy into our commitment to open and open source, but they're completely open in terms of supporting the whole ecosystem, the software stack that not only they produce, but their partners produce in many cases even their competitors produce. So that, that, that kind of mentality really resonated with us. Yeah, so, so Shane, you wrote in, in the article announcing the acquisition that when the deal closes, you'll be running engineering and innovation inside of SUSE. If I remember right, Thomas DeGiacomo has a similar title to that right now in SUSE. Of course, Melissa D. Donato is the CEO of SUSE. Of course, the, the comparison that everyone will have is you are now the open shift to SUSE. You're no stranger to open shift, you know, Rancher competes against Red Hat Open Shift out in the market. I wonder if you could share a little bit, you know, what do you see in your customer base for people out there that says, you know, hey, how should I think of, you know, Rancher compared to what Red Hat's been doing with Open Shift? Yeah, I mean, I think Red Hat did a lot of good things for the, for open source, for Linux, for Kubernetes and for the community, you know, the Open Shift being primarily in Kubernetes distro and on top of that, Red Hat built, you know, a number of enhanced capabilities. But at the end of the day, we don't believe Open Shift by itself actually solves the kind of problem we're seeing with customers today. And that's why, you know, as much investment has gone into Open Shift, we just see no slowdown, in fact, an acceleration of demand of Rancher. So we don't, I mean, Rancher always thrived by being different. And the nice thing about SUSE as being an independent company, as opposed to, you know, a part of a much larger organization like Red Hat is we're gonna be as an organization 100% focused on bringing the best experience to customers and solve customers' business problems as they transform their legacy application suite into cloud native infrastructure. So I think, you know, the opportunity is so large there's gonna be, there's just gonna be enough market there for multiple players, but we, you know, we measure ourselves all success by how many people, how much adoption we're actually getting out of our software. And I said in the beginning, Rancher is the most widely used enterprise communities platform. And out of that, you know, what real value we're delivering to our customers. And I think we solve those problems we'd be able to build a fantastic business with SUSE. Excellent. Sheng, I'm wondering if we could just look back a little bit. You're no stranger to acquisitions. Remember back when cloud.com was acquired by Citrix, you know, back when we had the stack wars between the cloud stack and open stack and the like. I'm curious, you know, what lessons you learned having gone through that, that you took away and prepared you for what you're doing here and how you might do things a little bit differently with the SUSE acquisition. Yeah, my experience with cloud.com acquired by Citrix was very good. I mean, in fact, and a lot of times, you know, you really gotta figure out a way to adapt to actually make sure that Rancher is a standalone business all back then. You know, cloud.com was a standalone business. How are they actually fitting into the acquired business as a whole? So when cloud.com was acquired, it was pretty clear as attractive as the cloud stack business was. Really the bigger price for Citrix was to actually modernize and qualify their desktop business, which, you know, they're the absolute leader. It was like a $2 billion business growing to $3 billion back then. I think it's even bigger now with now everyone working remote. So Citrix will not only continue to grow the cloud stack business, but more importantly, one of the things I'm the most proud of is we really played a crucial role in modernizing and cloudifying the Citrix mainline business. So this time around, I think the alignment between what Rancher does and what SUSE does is even more apparent. Obviously, you know, until the deal actually closes, we're not really allowed to actually plan or execute on some of the integration synergies. But at a high level, like, you know, the, I don't see any really difficulty for SUSE to be able to effectively market and service their global based of customers using the Rancher technology. So it's just, you know, just the synergy between Kubernetes and Linux is just so much stronger. And in some sense, I think I've used this term before. Linux is like, Kubernetes is almost like the new Linux. So it just seems like a very natural place for SUSE to evolve into anyway. So I'm very, very bullish about the potential synergy with the acquisition. I just can't wait to roll up my hands and get going as soon as the deal closes. All right, well, Shang, thank you so much for joining us. Absolutely, from our standpoint, we look at it. It's a natural fit of what Rancher does into SUSE, as you stated, you know, the open source vision, the community and customer focus absolutely aligned. So best of luck with the integration. Looking forward to seeing you when you have your new role and hearing more about Rancher's journey. Now, part of SUSE, thanks for joining us. Thank you, Stu, it's always great talking to you. All right, and be sure, we'll definitely catch up with Rancher's team at the KubeCon Cloud DativeCon European show, which is of course virtual as well as many other events down the road. I'm Stu Miniman and thank you for watching theCUBE.