Source: fiercetelecom.com (originally published October 2019)
SUSE Exits the OpenStack Distribution Market
Open-source vendor SUSE announced in October 2019 that it was pulling the plug on its OpenStack Cloud product — ending both new version development and active sales — only a short time after shipping its most recent release. The company framed the decision as a strategic realignment toward two complementary platforms: its Cloud Application Platform, built on the open-source Cloud Foundry project, and a Kubernetes-based container platform.
Why SUSE Made the Switch
SUSE positioned the move as a response to where enterprise workloads are heading — hybrid cloud, multi-cloud, and DevOps-driven application delivery — rather than traditional IaaS infrastructure management. In a blog post at the time, the company stated:
“As SUSE embarks on the next stage of our growth and evolution as the world’s largest independent open source company, we will grow the business by aligning our strategy to meet the current and future needs of our enterprise customers as they move to increasingly dynamic hybrid and multi-cloud application landscapes and DevOps processes. We are ideally positioned to execute on this strategy and help our customers embrace the full spectrum of computing environments, from edge to core to cloud.”
Analyst commentary at the time suggested SUSE’s decision was also pragmatic from a competitive standpoint. Roy Chua, founder and principal at AvidThink, noted to FierceTelecom that SUSE had a smaller installed base of OpenStack customers compared with rivals such as Red Hat, Canonical, and Mirantis — making it harder to justify the ongoing investment required to maintain a credible enterprise OpenStack distribution.
What SUSE Moved To: Kubernetes and Cloud Foundry
SUSE’s pivot centred on two strategic bets:
- Kubernetes-based container platform: Kubernetes had become the de facto standard for container orchestration by 2019, and SUSE was already investing in SUSE Container as a Service Platform (CaaSP). Kubernetes offered a more developer-centric model that aligned better with modern application delivery patterns.
- Cloud Application Platform (Cloud Foundry): Cloud Foundry provides a higher-level platform-as-a-service abstraction, letting development teams deploy applications without managing underlying infrastructure details. SUSE’s Cloud Application Platform ran on top of Kubernetes, combining container orchestration with a developer-friendly PaaS layer.
Together, these two platforms allowed SUSE to target both operations teams (Kubernetes) and application development teams (Cloud Foundry) without maintaining the heavyweight IaaS machinery that OpenStack requires.
OpenStack Wasn’t Going Away — Just Consolidating
SUSE’s exit did not signal the death of OpenStack as a technology. By 2019, OpenStack was deeply embedded in enterprise private clouds and, critically, in telecommunications network infrastructure through NFV (Network Functions Virtualisation) deployments.
Roy Chua explained the telecommunications angle clearly:
“OpenStack is still a fundamental part of many cloud platforms, both within the enterprise and in the service provider markets. The majority of production NFV deployments are based on OpenStack, and even projects in flight at service providers are also OpenStack-dependent. Likewise, the major network equipment and solution providers have NFVI based on OpenStack as a VIM and while there’s a move towards using containers and Kubernetes, we’ll have OpenStack for a while.”
Roy Chua, AvidThink, via FierceTelecom
Chua also addressed the practical challenges of migrating NFV workloads to containers:
“Red Hat, along with their network equipment provider OEMs, and Mirantis are still committed to OpenStack, though efforts are underway to host VM-based VNFs within a container infrastructure (e.g. KubeVirt and Virtlet projects). The maturity of these projects is such that they aren’t quite production-grade yet and the adequacy of container infrastructure for NFV still needs work — I/O acceleration, shared library and kernel versioning, drivers, workload scheduling, plus most VNFs haven’t been converted to CNFs (cloud-native network functions) running in containers. We’ll see a gradual migration to containers than a quick drop off.”
Roy Chua, AvidThink
OpenStack Foundation’s View: Market Consolidation, Not Collapse
OpenStack Foundation COO Mark Collier offered a measured response, framing SUSE’s departure as normal market consolidation rather than a signal of OpenStack’s decline:
“The market for OpenStack distributions is settling on a core group of highly supported, well-adopted players, just as has happened with Linux and other large-scale, open-source projects. All companies adjust strategic priorities from time to time, and for those distro providers that continue to focus on providing open-source infrastructure products for containers, VMs and bare metal in private cloud, OpenStack is the market’s leading choice.”
Mark Collier, COO, OpenStack Foundation, via TechCrunch
Collier also cited analyst firm 451 Research figures suggesting a combined Kubernetes and OpenStack addressable market of approximately $11 billion at the time, with roughly $7 billion attributed to OpenStack.
Key Takeaways for DevOps and Infrastructure Teams
- OpenStack and Kubernetes are not mutually exclusive. Many production environments run Kubernetes on top of OpenStack infrastructure, combining VM-level isolation with container-level orchestration.
- NFV/telco workloads represent OpenStack’s most durable stronghold. The complexity of migrating VNFs to cloud-native CNFs means OpenStack will remain relevant in telecommunications infrastructure for years.
- Projects like KubeVirt enable gradual migration. Rather than a hard cutover, technologies that allow VM-based workloads to run inside Kubernetes clusters enable incremental modernisation.
- OpenStack distribution vendors are consolidating. Red Hat (now IBM), Mirantis, and Canonical remained as the primary enterprise OpenStack distribution providers after SUSE’s exit.
- SUSE’s move reflected competitive reality. Maintaining a credible OpenStack distribution requires significant engineering investment. Vendors with smaller installed bases face a difficult cost-benefit calculation.
Context: SUSE’s Broader Strategy
This announcement came during a significant period of change for SUSE itself. The company had recently completed its separation from Micro Focus and was operating as an independent entity. Focusing resources on Kubernetes — where the market opportunity was growing rapidly — rather than defending a smaller OpenStack position was consistent with the approach of a company needing to define clear strategic differentiation.
SUSE has subsequently continued to invest heavily in Kubernetes tooling, including Rancher (acquired in 2020), which gave the company a significant position in the enterprise Kubernetes management market. This trajectory suggests the 2019 OpenStack exit was the beginning of a deliberate container-first strategy rather than a one-off product decision.