SUSE CEO on how it will take on IBM’s Red Hat, grow through recession – Business Insider

Last July, Melissa Di Donato took the reins of the German cloud infrastructure company SUSE. Around the same time, IBM acquired SUSE's biggest rival Red Hat in a $34 billion deal.

That sale combined with the likelihood of open source thriving during the coronavirus crisis is increasing Di Donato's confidence in the company.

While that might sound counterintuitive its fiercest competitor now has a larger war chest during an economic downturn Di Donato feels that the opportunity has never been greater. She put it bluntly: "Our biggest competitor was taken out by IBM."

Meanwhile, downturns make open source software more attractive to businesses looking for cost savings, she argued.

"We provide a free alternative that alleviates the need to invest in proprietary software," she told Business Insider, "And [we] still maintain the high level of innovation delivered through our community."

The nearly 30-year-old SUSE builds open source Linux and cloud infrastructure products and then charges business customers for add-ons like support. Its offerings are similar to those of Red Hat, although SUSE launched a year before its biggest rival did.

Di Donato's belief that SUSE is particularly well-suited to weather the crisis has outside support, too: Experts say that opens source software companies often grow stronger during economic downturns and that open source software contributions may also rise as more people stay home,

"The opportunity is endless," Di Donato said.

Di Donato's assertion that Red Hat's sale to IBM is akin to being "taken out," comes perhaps from her company's own history. SUSE's has been shuffled between different owners through a series of acquisitions over the years, from Novell to The Attachmate Group to Micro Focus. In 2019, Micro Focus sold SUSE to the private equity firm EQT for $2.5 billion, which made it an independent company once again.

Red Hat now has the resources and backing of its massive parent company but, at the same time,developers may feel less certain about its direction now that it's under IBM's umbrella. (Red Hat didn't not respond to a request for comment.)

If IBM hijacked Red Hat's services, it "would be doing their customers a huge disservice," Di Donato says.

Interestingly, IBM is one of SUSE's earliest and biggest partners, which hasn't shifted since it bought its competitor. They both still pay for each other's services.

"We're a big portion of their business that they're not willing to give up," she said. "While they do own Red Hat, the mantra with IBM always remains open and agnostic."

Beyond SUSE, Di Donato has decades of experience in enterprise tech. She was chief revenue officer of SAP's cloud portfolio and a veteran of Salesforce, IBM, PwC, and Oracle too. Notably, she's spent the bulk of her career in proprietary software instead of open source. Because of her experience, she said that she also knows how to communicate with giant customers and partners like SAP, Microsoft, and Dell.

"I come to this role with a very different perspective," Di Donato said. "The most important part of our business is our customers. Everything that we do pivots around customer business requirements."

While the seriousness of the coronavirus outbreak around the world started to really become apparent in late February and March, Di Donato says it's been on her mind since December because SUSE has a large workforce in China.

Ultimately, the company's corresponding adjustments haven't felt too dramatic because nearly 40% of its employees were working from hom even prior to the pandemic. That's not uncommon for open source companies.

"We like to think open source is quite ahead of the curve in adopting the workforce of the future: We embrace this new way of working together," Di Donato said. "It's normal for us to be communicating this way online. We have no IP to hide within our company. It's openly shared across all our competitors in the open source Linux world that we collaborate on together."

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SUSE CEO on how it will take on IBM's Red Hat, grow through recession - Business Insider