Rancher, the computing everywhere platform leader, today joined forces with SUSE, the global open source, software-defined infrastructure company, making this a landmark cloud native transaction. Today Rancher is the most widely-adopted enterprise Kubernetes platform, with 100M downloads, and 30K active deployments across 300 global enterprise customers from Disney to Fidelity Investments to Verizon and beyond. Rancher has been an exceptionally well run and capital efficient while remaining one of the fastest growing mid-stage software companies. The company consistently beat revenue targets for sixteen quarters in a row. Developers and ITOps professionals love the product for its ability to elevate them from individual contributors to strategic leaders. The founding team has worked together for a decade and were united in delivering on their mission of giving customers the freedom to compute everywhere – from the data center, to the cloud, to the edge, and beyond. As I reflect on our 5+year journey with Sheng, Shannon and the rest of the Rancher team, here are some learnings that come
to mind.
It’s always about the people
I have known Rancher CEO Sheng Liang since 2009. He was the founder of Cloud.com, a peer company of the one I led, StorSimple, both of which went on to become successful first-generation cloud infrastructure companies. After StorSimple was acquired by Microsoft to become a key part of the Azure offering, I joined Mayfield, which had been one of my investors, in 2013. In the fall of 2014, Sheng came by to share the vision for his new company, then called Granite Systems. I pulled out a concept deck on the future of computing everywhere that I had been working on, and we came to a complete mind meld on what the industry needed. We believed this would be a nextgen computing platform which would allow users to deploy applications on public and private clouds, on the edge and on iOT devices. He had already assembled the founding team with the key leaders from Cloud.com – Shannon Williams, Darren Shepherd and Will Chan – and we were honored to co-lead their Series A.
Culture has to be built into the founding DNA of companies
Sheng is one of the smartest but also the most humble person I know and that was the culture he built at Rancher. He is also a very transparent, intellectually honest leader which allowed us to have drama-free conversations in and out of the boardroom. Their culture of listening extended to their community, even leading Rancher to make the tough decision to kill their darling – a beloved but closed product – in favor of embracing Kubernetes, the open source standard. The company was able to attract amazing talent at all levels and had one of the lowest attrition rates in the industry.
It takes products, not hype, to build companies
As containers replaced VMs for the cloud age, there were many players claiming to solve customer problems. Rancher quietly focused on building delightful products, developing a community-first, bottoms-up adoption strategy, a sustainable and scalable business model focused initially on usage over revenue; and worked with an ecosystem of partners to build key components. They also stayed true to the open source model, rather than adopting a hybrid open source/closed product model. All this served them well, and they soon found their go to market motion.
Pivots take the courage of conviction
While early stage companies have to always be nimble and adaptable, Rancher definitely had its share of challenges. They switched from Docker to Kubernetes, from a services to a SaaS recurring revenue model, and from Kubernetes distribution to Kubernetes management. Despite all these changes, by staying close to the pulse of the community, they built a strong fan following and user retention. Their product-led GTM delivered capital efficiency and allowed them to beat and exceed their forecasts for sixteen quarters in a row.
Success is never accidental
This is one of my core beliefs and the journey with Rancher has proved that. They built a culture of intellectual honesty as well as continuous learning, prioritized teamwork, developed a collaborative dynamic with all their partners and investors, and always kept their customer needs front and center. They innovated beyond the feature sheet to ensure that their technology solved customer problems. They took their learnings from leading a company during the 2008 downturn to stay focused on their true north. Along the way, they took advantage of all the ways investors can amplify the impact of companies – getting early feedback on their value proposition from our CXO network, joining a CEO coach cohort of our companies, participating in our storytelling workshops, and working with me on many strategy sessions outside of the board meetings. One of the most rewarding phases was to work closely with them as they went from start-up to scale-up, and to help them evaluate their options to join forces with a larger company. With the acquisition by SUSE, a global open source leader, Rancher now provides customers an accelerated path to digital transformation and a way to seamlessly innovate across their business from the edge to the core to the cloud.
As people first investors, we look forward to watching them continue to elevate the community of developers and ITOps professionals worldwide. Please join me in congratulating Sheng, Shannon and the entire team on the next phase of their journey.
Originally published on LinkedIn.