 Today we are going to talk about something which is really critical and since I have been Covering this company for a very long time at the same time. I have been interacting with the community And I've seen some misinformation there. So I just wanted to talk about it and that is Suze as you all know Suze has been resold Required and this time the buyer is EQT from Sweden. They bought Suze from Micro Focus And if I'm not wrong, this is the fourth Acquisition of Suze all the way from early days from Novel to attach mate to Micro Focus and to equity the I Feel that Suze went through the roughest patch during novel days because Novel had their own proprietary products And they were somehow either competing with Suze's open source project at the same time They're trying to integrate them So there was a lot of conflict at the same time back in those days Novel had an agreement with Microsoft and that was the hot You know period where a lot of things were going on in terms of patents aggression from Microsoft So Suze got beaten up a bit back in those days though by now Microsoft has changed totally. They are kind of you know, I Considered them as a you know brand new company with a totally new approach They're very friendly to Linux and open source. I talked to them often. So so I do know what is going on in there But once Suze was acquired by attachment then things changed because Suze kind of became an kind of Independent business within attachment because attachment Splayed Suze and Novel and that's when Nils Brockman and his team They they took the pen you know kind of leadership of Suze and start driving the company in the right direction And then when Suze kind of stabilized and then attachment Kind of merged or by was acquired by micro focus that's when Suze got financial stability from micro focus because though even if micro focus was not a very well-known a company They they were into a legacy business. So they did have a lot of financial Support that Suze needed at that time and after that you must have seen that Suze has been hiring people a lot They have grown beyond their typical Linux market and they are into cloud and containers and all those You know latest emerging technology stuff that they are doing now I've been talking to Nils Brockman every Suze gone I meet him and talk to him and I talked to a lot of other you know top-tier Suze Folks all the way from CTO which is Thomas to Michael Miller And so I have a very good idea where Suze is heading at the same time I have a lot of friends in in the open Suze community because I also use open Suze tumbleweed So I do get a lot of insights From from the company that was going on in there both on the community side as well as the company side So I'm quite confident that things are moving in the right direction So when I heard this story that they are going to get acquired I you know, I was like, okay, let's talk about it. So I I talked You know, I set up a phone call with Michael Miller who is the VP of strategy and alliance at Suze And we had a you know, 13-minute long discussion over phone where we you know discuss different topics So that there are certain question people have in their minds. I tried to get answer to this question I have posted a story which you can read but here's the gist The number one is that you may be wondering who is eqt. So as Miller Explains that he calls them a growth Investor like other invest, you know Private investors where they buy a company and then they try to squeeze as much profit from those You know hot companies as quickly as they can And then there are companies who acquire, you know promising companies and they operate those companies for a long term So that they can get profit for them So these equities or you know private equity firms, they don't invest in the company per se They they look at the company their business model is basically that there's a promising company acquire them Operate them and make money from them and then you know, you can let them die or you can sell them off again So you invest like let's say two billion in it into a company and after three years or four years or five years You will sell that company for let's say 10 billion or in the meat So so so this is this is how it works. It's more like investing like venture capitalist, but it's different kind of But the way equity is different according to Michael Miller is that they are growth Investors they are not, you know that vehicle private equity investors So what they do is that they invest heavily Into into into the areas where it's a need support at the moment so they can grow rapidly and fast Become successful so they can by they I mean equity can get returns on their investment faster But this investment is coming not through the cost-cutting or operating the company that they want But instead it comes through Investing heavily into the company and get heavy returns back and Suze is already a promising company Last year they made something around 305 million dollars, of course that is not huge compared to Red Hat Which is something about four billion billion dollars, but I mean if you look at Suze's history It has been going through a rough page. I Mean rough patch, but the company is resilient enough to just continue to survive and thrive and The problem with the Suze was that it was mostly trying in my opinion Those Suze people may disagree is what just trying to stay afloat trying to survive now It has money to not only survive, but it spreads wings and actually take off and fly and that's what they have been doing If you look at Suze stories for the last two years ever since micro focus acquired them I mean they are in the cloud now. They have their own open stack. They have cloud foundry Distribution and they have container platform So they are you know spreading into the areas where they need to spread So so that is what you know equity will get in you know from Suze You know they will invest in Suze and they'll get a lot of money back now Miller says that you know equity typically Gives three to five years to a company To show some returns so you can safely assume that equity will be investing in Suze for at least three to five years before they started squeezing profits out of them But as I said Suze is only profit-making company from what I know and So they it should be you know And it's it's more about the more you add sugar the sweeter it becomes so the more money equity invest into Suze The better it will be now. What about micro focus if Suze was a profit-making company Why would they sell it now Miller says that micro focus is also kind of growth Equity you know investor they acquired Suze and they sold at a profit But micro focus still was going through a rough time the the reason was that I feel they made a big Bad big mistake by acquiring HPSS last year or last last year for 8.8 billion dollars That was massive HPE was already kind of struggling so they bought HPE and That was a big hit and then their CEO left the company and the company shares also start tanking So even if Suze was relatively profit-making company it was making regular profits this offer is Something that was a great help for micro focus suddenly you are looking at 2.0, you know 8 2.5 billion dollars in cash that's a lot of money to recover all those losses that you're making So it was you know a deal they could not say no to so they sold it So that's what it meant for micro focus now What does it mean for Suze as I explained earlier that equity will be investing in Suze And this is what Suze needs. I Was reading a story at Oh my god a bunch of and I was kind of it's funny because The author wrote that is Suze is not a company that is innovating and they shouldn't know it innovation is the most Abused word in the in the tech world everybody is innovating something but what are we innovating and Here is the thing that people don't understand Innovation is good. It's important. But most important is that what are you going to do with that innovation? I innovate let's see a Mechanism where you can Fly cars, but if there are there aren't enough business models They can build a business around these flying cars. What good is that innovation or technology? so more important or equally important is What are you going to do with that technology if you look at the whole desktop living's word? You'll see a lot of innovations so-called innovations happening, but you cannot put it to use you cannot bring it to users So it fails. So what Suze is doing is that? It solves real problem for real people and not those problems doesn't have to be innovative Sometimes you just have to help a company run their infrastructure Safely in a stable manner so they can run their business. That is why Suze is being used Across Europe across South America and a lot of you know Asian countries by companies which has been around for Decades Because it offers that stability. So so this is that's what Suze has been doing for a very long time And Suze don't forget is the oldest Linux vendor Linux was Announced in 1991 by Linus Thorwitz and 1992 Suze came into existence 1993's red hat came into existence and Suze has also been one of the leading contributors one of the leading contributors to a lot of open source technologies So so saying that they are not innovating simply means that you are not keeping an eye on Where what technologies are being developed if you're just looking at the desktop icons then yeah Maybe Suze is not investing but if you look at a lot of other work that is going on there Suze is the lot of thing Linus Thorwitz is not innovating anything other than Linus Linux kernel and gate but The way he manages and maintains like external that is even more critical than a lot of Innovation put together. So please don't abuse the term innovation Suze has been contributing a lot and they are contributing Whatever you can expect from a company like that. So that's great go and see any open source projects Not the desktop logic not the RSS feeds For the next desktop, but actual open source project and you'll see Suze there. So what it means for Suze is that as They evolve further, you know Graduate from being a Linux vendor and they go and target all these emerging technologies And as Michael Miller told me that you know, they're looking at machine learning They are looking at IoT of course containers and cloud is already there. So they need to To to to have technologies in-house expertise actual technology that they can productize Sometimes companies, you know adopt the organic route where Technologies are developed in-house over a period of time At the same time the market is changing so rapidly that you cannot Afford to have that much time to develop those technologies So what you do is you look around and you acquire companies that have developed those technology And that's why you see a lot of acquisition happens Even companies like Microsoft or Apple or Google they cannot develop everything internally You know, so so they do have to go out and acquire companies. So when I talked to Miller So he said, you know that Equity will be you know investing into areas first of all to support and run their existing business, which means hire more people So that they can expand their team Because the business is growing. So you need more people to handle that business at the same time Invest in into buying new technologies and new companies So so so that's how Susie Susie will get help from equity to grow at a very faster pace Then it was growing earlier on the micro focus So I think that is good news for you Susie at the same time since Under equity Susie will not be another business unit of another software company Which has been happening since novel attachment and micro focus days now Susie is an independent Kind of independent company inside an equity firm. So being an independent company also means that They don't have the same infrastructure that they were getting at micro focus or novel or at attachment Now they will have to hire a lot of more top-tier people like they need a CFO They need a CIO and a lot of other people. Sorry Who can you know handle those areas? So Miller told me that, you know, they will actually be expanding Not only top-tier, but also a lot of other areas where they need to grow faster So you will be seeing Susie actually growing in in the in the coming years So so from Susie's perspective, I think it's a good news because That's the kind of help they needed. Now, what does it mean for open Susie? So I was talking Richard Brown who's a good friend of mine and he's also the chairman of open Susie board I think my focus is shifting because it's GH5S and I said it on autofocus and you know GH5S is not known for autofocusing. Anyway So I got up in the morning and I started chatting and he was in the UK for on the vacation And he said, you know, he got a call from Brockman with the CEO of Susie to reassure him that First of all that you heard the news from me and second is that you know, nothing is going to change So I asked his opinion and he was like, I mean, that's true You know opens Susie or open source is the heart of Susie. In today's world You cannot survive or sustain or grow without open source So open source is very very critical to Susie and I mean, that's there, you know When you look at Susie or Red Hat, these two companies know open source is the heart and soul of these companies. So That is not going to change. So nobody in the open Susie or open source committee should worry about anything changing In fact, it may get better and better because being a been independent business unit Brockman won't have to, you know, justify it to a board, you know, why, you know, we are doing this So because that's how we do it, right? Open source is the way how do we think so there's no argument as such So so I think in overall, I feel that Things are going to get better for Susie after this acquisition because first of all, they are going to be an independent company Which, you know, which will be making decision for themselves All the profit that they make will be invested back into the company for the future growth at the same time Equity will be injecting them with all the steroids that they need to further grow. So, I mean, there is no no worries in terms of Susie that Oh, they're getting acquired again. No, but it's all good Eventually I would love to see Susie become an independent company like Susie I am see like redhead or Microsoft Google or Apple So when I asked Miller, you know, of course Susie has already always been owned by another company. So they don't have any say Microfocus could have spent Susie as an independent business so that, you know, it could just run Independently but the thing was they needed, you know, as I said, they were going through a rough patch. So It was it made more sense for them to sell it and get that billion dollars Then to, you know, spin it as an independent company But as equity gives Susie at least three to five years, this may be the time where Susie doesn't have to kind of be Accountable to another software vendor They may pursue the the road of becoming Independent company though I cannot comment or say precisely or even Miller did not know say specifically But he said that that is, you know, one of the option they will be looking as they move forward And I think you know what? Looking at the political situation that is going on in this world number one the way the Trump administration is waging Unnecessary trade war and which is going to hurt Americans a lot At the same time next year, Brexit is happening So I think this is good news for Susie because Microfocus is a US UK based company after Brexit things are going to be very very challenging because Susie is a Germany German company and there will be a lot of things that will create a lot of conflict in the UK So you can US are going to the same phase right now They created unnecessary chaos for no reason so so By you know by getting bought by a Swedish company Susie has kind of you know Awarded all those, you know challenges that would have come with brexit next year at the same time being a Europe-based company Susie is kind of Because you know as the trade war war is looming and a lot of Consumers are you know being you know around us base companies Susie might be in in a position to take advantage of this and May spread its presence within within the block or within those countries Which are you know kind of facing a trade war with the US so it may see you know Growth in adoption within within Europe within South America or within Asian country So that would also mean good news for Susie. Anyway in overall I think this is really good news and we should be happy about it that you know Susie is actually Gradually moving towards becoming an independent company. So that's my overall analysis of What's going on with Susie? Thanks for watching and don't forget to subscribe to this channel so that you can keep and you know updates every day The same time you all know that As I'm building TF fire, I'm looking for sponsorships So we have a lot of things to offer to companies. So if you want to become a sponsor If you want us to talk about your technologies your business models, please become a sponsor of TF fire You can find just mail it to me and I'll send you all the details and as far as a reader's are concerned If you value your content, please become a Supporter to patreon the links to the patreon is below. So as you all know, there's no free lunch Somebody has to pay the bills. So please support the good work that you enjoy. Thanks for watching and see you next time. 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