HPE deal makes SUSE an enterprise heavyweight

SUSE will become the preferred Linux partner of HPE.

Micro Focus, the owner of SUSE, is merging with the software business of HPE in a deal that’s valued at approximately $8.8 billion. The new company will continue to operate as Micro Focus, under the leadership of Micro Focus. Micro Focus will be making a $2.5 billion cash payment to HPE and HPE shareholders will acquire 50.1% ownership of the merged company.

The merger was announced the same day Dell-EMC closed their merger.

“We believe that the software assets that will be a part of this combination will bring better value to both our customers and shareholders as part of a more focused software company committed to growing these businesses on a stand-alone basis,” said Meg Whitman, President and Chief Executive Officer, HPE.

Micro Focus becoming an open source powerhouse?

Micro Focus was founded in 1976, the same year Steve Jobs founded Apple. But it was relatively little known until it acquired the Attachmate Group Inc. in 2014. That acquisition brought to them the oldest Linux company SUSE and its huge portfolio of open source enterprise products.

SUSE had been going through a rough patch, since it was acquired by Novell, and Micro Focus provided it with the financial stability that this resilient company needed. SUSE remained a relatively ‘independent’ unit inside Micro Focus, continuing its operations and growth. Micro Focus invested heavily in SUSE, expanding its workforce.

SUSE’s significance within Micro Focus was evident with the fact that Nils Brauckmann, GM and president of SUSE, was promoted to the position of CEO of SUSE. Brauckmann also joined the board of directors.

With this merger, SUSE will become stronger in the cloud business. Micro Focus and HPE are entering into a commercial partnership that will make SUSE HPE’s preferred Linux partner. The two companies will also work closely on OpenStack.

“SUSE and HPE have a long history of successful strategic partnership,” said Brauckmann. “We are excited now to explore new ways of expanding upon that with a commercial partnership focused on areas such as cloud computing, software-defined networking and application platforms. The combination of SUSE’s open source expertise and OpenStack capabilities with HPE’s Helion and Stackato offerings can create best-in-class enterprise solutions for our mutual customers.”

This merger puts SUSE in a much stronger position against Linux rivals like Red Hat and Canonical. SUSE is among the top 10 contributors to the Linux kernel. Additionally, SUSE sponsors openSUSE, the community based Linux distribution. Put all of that together with HPE’s software portfolio and you have an enterprise powerhouse at your hands.

Copyright © 2016 IDG Communications, Inc.

Download CIO's Roadmap Report: 5G in the Enterprise