Open-source enterprise tech is booming and SUSE wants a big slice of the pie. There are apparently more than 56 million developers contributing to open-source projects globally. Over 95 percent of organisations are reportedly looking to open innovations to make sure their businesses are meeting all their digital needs.
With India’s massive talent pool and the government’s increasing push for open-source technologies, it was inevitable for software giants like SUSE to take notice, even more importantly, to act. At a time of Big Tech layoffs, SUSE has opened a new centre of excellence in India’s Bangalore state. This is its third such centre globally but one where “the lion’s share of the investment is going.”
In an exclusive interview with FE’s Saurabh Singh, Imran Khan, Chief Customer Officer at SUSE talks about why India is top choice for the company’s global expansion plans. Excerpts.
Why build a centre of excellence in India now?
Post the pandemic, there have been challenges across the world with some of the macroeconomics, but we’ve tried to ring-fence ourselves from a lot of that. When you look at our financials and our growth story today, whether it be our top-line ACV or EBITDA, we’re in a really good spot because a lot of technology, especially on the Linux space, is so embedded in our client base that it’s a necessity that they need to keep on landing and expanding in that particular area. That was one of the reasons why we said, look, we need to future-proof the organisation in line for growth and that’s why we made the specific pivot to say we want to build a centre of excellence. We did some due diligence around where could we find the best talent to actually support our three distinct paths for our portfolio and India was the top choice for a number of different reasons. We picked Bangalore because it made perfect sense. It will allow us to track the right talent to help us grow our business. It’s not about cutting costs elsewhere to move some of the infrastructure out there. It’s far from it. It’s organic growth that we’re looking to plug in and part of our planning for workforce entitlement across the company is going to be in India now because of that reason.
What are some of the big focus areas for this centre of excellence?
Our starting point is really around our engineering functions specifically on our Linux portfolio. So, we’re looking for an augmented kind of engineering team to be built there. Then we’re also going to start to build a support centre out there and then work our way through the different functional areas of SUSE. It’s going to be a cross functional augmented delivery organisation for us across all the different aspects of what we do. It could be engineering, it could be support, it could be services, it could be IT. It would help us drive co-innovation as well. Because you’ve got everybody in one location, it allows you to cross fertilise the intelligence whether it be support folks with the engineering folks to actually start to help build innovation and look at our roadmap aspirations. But we need to go there in bite-sized chunks. At the moment, we’ve got about 82 people there already. We’re looking to grow that aggressively over the coming months and quarters.
What does the initial talent pool like?
We’ve just recruited a general manager from Salesforce that’s going to be the person responsible for the centre of excellence under my direction. The calibre on the skills that we’ve recruited for are really technical engineering folks around the Linux space today. We do have a pipeline of folks that we’re looking at around our container management as well. The reason why we’ve chosen the Linux space on the engineering side is because that is our bread and butter. We know that better than most people. We want to make sure we organically grow in the right way rather than throw everything into one pot. We’d like the right ingredients in there to start off with.
How many people are you looking to recruit down the road?
Ultimately, we’d like to get to at least about 20 percent of our total workforce to be housed in the centre of excellence.
How will this centre of excellence be placed globally?
These people are going to service the world. So, this is part of our global footprint. They will just be homed in India as a choice of location. But they’re going to be integral in building and helping build our roadmap, support our clients as well as everything else that they do. But it’s not going to be specific to a region. It will be a global footprint that they will service the world from.
Your take on Big Tech layoffs?
When you look at the macroeconomics and what it’s doing to a lot of the tech companies out there today, some of it is like, wow, this has never been seen before unless you go back to say the early 2000s, right, and we saw some of that after the dot-com boom. But when you look at it now, one of the things that has really resonated with me is that a lot of the growth companies are actually going through change that they have never experienced before. So, when you look at Meta, AWS and all the other companies out there that are doing some really major large layoffs, they’re not even equipped to do that because they don’t know how. For the longest time, they have just been fixated on recruiting thousands of people. This is the first they’ve had to actually figure out how do we lay people off. They don’t have a playbook for that. I’ve worked for a lot of legacy companies where we’ve had to do that for survival. But now, it’s a generic thing across the globe. Everybody’s going through it. And I like to think, on this particular occasion, based upon the fact that we [SUSE] were quite lean as a company, we’ve been isolated from some of the problems out there, so we’ve been weathering the storm of some of the macroeconomics which is allowing us to put the investment in India where we need it to future-proof us.
But does it make you cautious?
I think everybody needs to look long and hard at their current environment and I think you should always do that, the same way that we should manage our own personal financials on a monthly basis. There’s always room for fine-tuning. I would say yes, we absolutely look at our financials, but it’s not going to stop us because if we’re not careful, you can go into a paradigm where you’re paralysing the company by stopping investment to allow you to grow. A lot of people are predicting it’s going to be another 24 months before we start to see the downturn that we’re going through, but no one can actually foresee what’s going to happen.
What is SUSE’s mission statement?
We want to be everything open within the guards of the open-source environment, especially in our traditional Linux space. When you look at where we are today, a lot of our portfolio is best in class and that’s compelling. We don’t do a good job at actually publicising that. When you look at the number of the Fortune 500s that use our technology, it’s over 60 percent. When you look at our customer satisfaction, we are best in class, beating all our competition out there as well. We’ve got the right ingredients to focus on our technology stack and now with the augmentation of some of our container management solutions, it actually helps us to be more compelling and be more of a vendor of choice as well.
What does your current portfolio look like?
For the last 30 years, our business has been broken up into three units— business critical Linux, enterprise container management and Edge. Linux was developed a shy or just a little more than 30 years ago and we were the first ones to really bring an enterprise solution to the market. We acquired Rancher just a little over two years ago and they’re one of the most widely adopted container and cloud native solutions on the market today. This has really helped us build out a really robust profile and in that same way, we’re also making a lot of great work happen in the edge space as well and one of the first to deliver a fully integrated cloud native solution that addresses our customers’ needs to scale. So, we’re covering the three core areas of where technology is headed, especially as we’re looking at the digital transformation landscape.
Open-source growth story?
When you look at the Linux business as an example, the market penetration is about 17 to 18 points in growth. And when you look at our container business, including Edge and some of the Edge aspects, it’s about 35 to 40 points in growth. So, there are two different dynamics there, but obviously because you got the traditional space which is Linux, very little opportunity for growth, but good healthy business. And then you’ve got the cutting-edge technology which is our container and Edge piece of it, which is more aggressive especially in the telco space.
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