Escaping Vendor Lock-In and the Hybrid AI Future

Hey everyone. Welcome back to our Techstrong TV coverage here at SUSECON in Prague, which is a great city. If you've never had a chance to come to Prague and check out the old town and some of the great...

It's an amazing European city. Wanted to continue our conversations today. Our next guest is Werner Noblick.

Werner is the CRO of SUSE. And, I was talking to Werner off-camera about how he came to SUSE and everything else. " I don't know if you ever watched "The Twilight Zone"- Yeah, I remember.

TV series back in the day. There was this man, he was stuck in sort of a Groundhog Day. Every day he'd wake up and it would be a trial.

Yep. Except one day he was the prosecutor, one day he was the defendant, one day he was the judge. And it's kind of like that with SUSE, where a lot of the exec team have worked together- Yeah ...

in other companies in different roles, but yet, you form a bond in working together. You begin... And it's a team effort, right?

And somewhere, I was interviewing this fellow named Basil. " So I can only underline this. Absolutely.

Yeah. And people work with people. Absolutely.

And it is. You need to have a... You want to have a- Even in this age of AI.

AI. You want to have a trusting surrounding, you want to have a safe and feel safe- A comfort level ... a safe environment that you also can make yourself vulnerable.

Okay? If you don't trust people, you don't make yourself vulnerable. If you don't make yourself vulnerable, you actually will not be able to, I think, progress as good as you can if you make yourself vulnerable, because then people can also further help you.

Okay? You know what they say when they talk about it's better to have love and lost than never to have loved at all, right? Yeah.

Nothing risked, nothing gained. So Werner, being CRO is something you're comfortable with, frankly. You've been leading sales organizations, you were at Red Hat for a very long time, financial industry.

But it's something you're comfortable with. You're comfortable with the team here, the leadership team. I got to imagine that was a big plus for you to come on board and do it.

I've spoken to a lot of CROs. I've been a CRO. Every company's a little different.

In some companies, CRO is strictly sales. In other companies, CRO also deals with marketing. Yep.

The whole go-to market. In some companies, it even has a role in product. Yep.

Talk about, here at SUSE, what's your primary focus? Obviously, my primary focus is the top line, bringing the top-line revenue for the company. And with this, the resources which are my direct organization, on one side, obviously all the sales professionals directly going after the large accounts.

Then obviously the technical support for them, like the solution architects- Sales engineers ... solution engineers, obviously. Then obviously the ecosystem, as you see here in the conference, we have the hyperscalers.

Amazing. We have the big GSIs- Amazing ecosystem ... we have the hardware providers, we have the ISVs, we have the local solution providers.

You need to work with them, enable them, again, also sell to them that they can carry your solution to them. So for this, I have a complete partner organization, which is part obviously of my organization as well. Then you have classic functions like MDRs, SDRs, so like inside sales to obviously do the early top of funnel, and also own the complete field marketing organization as well.

Mm. So, field marketing pretty much reports to me. Obviously, the leader for field marketing is also part of market's team.

Marketing. Right. Okay.

From a global CMO leadership as well, but kind of reporting-wise, they're directly even closer connected to the field. That's them maybe executing the campaigns. This is a classic globally.

Yeah, no, I've seen this model before. I like that. Yeah.

But if you do a roadshow and do just whatever, a roadshow in the US, then obviously field marketing US will be executing this. You need someone on the ground who works with sales like this. Yeah.

Again. So then also the complete sales operations, so revenue operations, everything around enablement, that's all a part of my organization. So that's like roughly, call it 700 people are part of my organization.

But then also I have a specific team talking about, it's like a tech sales leader. That person also sits on the leadership team of Thomas, so our chief product officer, to build the bridge between what we're doing in the factory side- Ground level ... on the product creation- On field ...

and on the field and have the good connection back, funneling the feedback back to the product teams. That's kind of my org. So I guess you're trying to tell me you're not very busy.

Exactly. Yeah, exactly. You have to orchestrate it, and you need to have, obviously, a good leadership team and we try and we have a philosophy of really we want to be as globally consistent as possible.

At the same time, we obviously want to gear towards the local circumstances, and it's just the fact that APAC is a different little bit go-to market than North America. Europe. Sure.

Okay. Or even also EMEA. Okay.

We don't have different products, we don't have market-specific products, but still it's different. Selling in Japan is different than selling in China, is different than selling in Australia. Selling in Australia is, again, a little bit more similar than selling in the US or in the UK, okay?

So there you have more like a little bit of the Western culture. Yeah. SoUm, but we're trying to- It's also a question of maturity of the market.

I found Aus- as I said, I've done- Yeah ... so Australia, it's a smaller market, but a very mature enterprise market. Yeah.

Very clear. Sophisticated IT people there. Where you can apply also what work, whatever in the UK, or in the US, and so you can pretty- Move it there ...

clearly apply there. Singapore, another one like that. Yeah.

But you're right, every one is different. My grandmother used to say that about her grandchildren. Yeah.

"Everyone is different. " Every market is different. Yeah.

Of course, we're living in interesting times, right? And in some ways you've been preparing for this, the years in Red Hat and everything else. You're familiar with the open source model- Sure ...

which is key to SUSE. I live in this world since back in 2003 when I joined Red Hat. Yep.

The big message here is around sovereignty and resilience. Yep. This is something that's fairly new, right?

For most of my life, and probably for most of your life, we have been taught, trained globalization. Yeah. Global supply chain, right?

We didn't think about that sovereignty issue. Yeah. We didn't think about it at a national level or a regional level.

We didn't really think about it on a personal level. At all. We're all part of this internet thing.

Yeah. What a global village. Yeah.

It's a small world. All of a sudden that's now, and I'm not necessarily happy about it, but that's- It's a reality we are facing ... it's the reality of the world we live in.

Yeah. Right? " Yeah.

Because it is a freedom issue. Yeah. How does that affect you as CRO?

So now it's not just knowing Australia, but what sovereignty there, what sovereignty here? The US has their own sovereignty issues. Yeah.

I just wanted to say that actually for SUSE, the whole sovereignty topic is not new whatsoever. Because we being a European company, we still have also quite a healthy business in the US public sector- Absolutely ... in the government.

And to be able as a non-US company to act and sell to the DOW, to the federal agencies, you need to have a special set up with a independent proxy board, which is kind of appointed by the US government. You have to have builds which are built and finally digitally signed in the US. That's exactly pure sovereignty, where the US wanted to make sure whatever goes into the US federal agencies is truly sovereign to the US.

So for this, we have a complete separate company set up- Got it ... which is called RGS. It was came from the Ranch Acquisitions or Ranch of Government Solutions.

So we are very, very familiar with this in US, we have doing this for years. Now, obviously, the sovereignty topic was not a big topic in Europe. No.

And you know, that's why all the European customers and companies, but even us in Asia, depend a lot on US tech. Okay. Yeah.

And now the US tech environment, there has been just certain consolidation. There has been certain behavioral changes. There have been geopolitics influence.

You're being very kind. Okay. And suddenly oh, saying, wow, governments or companies look at their IT budget, oh, 80% goes across the pond on the other side.

Okay. And only 20%, or maybe even less, stays here. Here.

So it's not about, wow, what, the US companies are bad, or it's kind of there is something wrong with the technology. We're saying it kind of is not right, that kind of whatever government organization, it's taxpayers money from Europeans, 80% of this goes over to the US. So I don't think it's about, oh, we need to become US free.

Not at all. But still, are there alternatives in Europe? Something equitable.

Yeah. Are there alternatives in Europe? And then if there is not a, let's say a kind of a equal offering, then there should be like a preference of European solutions for European organizations.

The same way it is there. Same way as is over there. And I think that was never thought about and now obviously suddenly is at the forefront.

Okay. And it's also especially the forefront out of things which I happen to say, what does sovereignty mean? And the main thing, it means I have control.

I am in control of my- I think it's freedom. It's freedom, control, whatever you'd say. We always talk about you need to have choice, okay?

So that you kind of in control of your own destiny, okay? And I think people, not intentionally, maneuver them in a dependency which now is not healthy anymore and the result of it, they are not in control anymore. And rather, whatever the infrastructure's potentially controlled by somebody else.

Okay. And that's why obviously this is such a big topic. We as SUSE, we are the single largest- European ...

European infrastructure software provider. There is no other European operating system in the Kubernetes space. You don't see that many there either.

Okay. Our main competitors are all US companies. Companies.

Okay. So from that perspective, we obviously have a special, I would say, positioning, and that gives us clearly a, let's call it a tailwind. A leg up.

Yeah, sure. With now customers. And again, not just governments, but also commercial customers as well.

The market, the whole market. Yeah. First of all, I got to tell you the truth.

You threw me a curve when you said DOW. We don't say that. I know, but it's the official journal, you know?

No, it's not. Really? Technically only Congress can change that name.

Oh, okay. Someone can't sign an executive order- I was- ... and decide to change the name ...

I was following the executive order. Yeah. Well The courts are going to have something to say about that, but- Yeah ...

we'll talk about that off camera. Yeah. Anyway, but you're 100% right.

That has been going on. I used to sell, one of the companies I co-founded, 60% of our business was with the US federal government. Yeah.

And it is a world unto its- Yeah ... a Byzantine world unto itself. ButNevertheless, forget government for a second.

I think, as you said, it's a question of choice. It's a question of freedom to say, "I want to pick the solution that I think is the best for me," whether it's individually, organizationally, nationally- Yeah ... on a municipality, whatever.

I want that choice. At the same time, budgets are under so much pressure. We're hearing companies not replacing people with AI, but really laying off people so they could spend money on AI.

Yep. And that's putting a lot of pressure on, well, what exactly am I spending this budget on? And that's something I'm sure your people are filtering up to you.

As you look at budgets in 2026, what are the hot button topics? What are people looking at? Again, right now, from a pure budgetary perspective, what is becoming a real challenge is the spike in hardware prices.

Yeah. So due to the memory shortage, okay? Can't get memory.

Can't get memory, and this puts, again, obviously supply and demand, which is right now out of whack, and then market dynamics work, so the prices go up. And that will make suddenly, for certain companies, potentially the project not even anymore viable because, oh- No ... their RI calculation doesn't work anymore.

Or even worse, saying, it's still a good project, still has a good RI, but I don't get it delivered until, whatever, three months, six months, whatever the delivery time is. So there puts a constraint in because they don't even know when they will get the hardware. Okay?

Then you have the hardware providers, because they don't know either, making offers with a validity of seven days. Meaning, in a large organization, they're not capable of getting through their approval process- No ... the machinery, within seven days.

So, it's expired, so the next offer comes again, whatever, when the price up again. Price up. So that's right now as we speak currently, is quite an issue for organizations- Yeah.

I would imagine ... really is the hardware prices, hardware availability, again, calculating the projects. Obviously, at the same time right now, still, IT spending overall is quite healthy growth.

Yes. Okay? So on the software, it's actually in the double digits.

Okay? They're investing. They're investing.

Obviously, still a lot is funneled into AI. Yeah. But we are still, when you look at the AI, and that's also what you may have heard in today's keynote sessions, the majority of the customers are still in that proof of concept- Yeah ...

pilot phases, and have not yet truly realized the true business outcome of these AI implementations. Because there is still this big gap or chasm to get these things into production and truly get the return. And that's what we try exactly to solve with the announcement also we made together with NVIDIA today, to really build an assembly line, have this AI factory- Yeah ...

as it's really called, as a true factory sense. It's a real assembly line and it's automated, and it's either, again, AI driven, so- Yeah ... infrastructure for AI and AI for infrastructure.

So these are our two terms which we are using. So there's quite a lot happening. Where we then helping customers when it comes to budget is, obviously customers have, I would say, three environments.

They have a legacy environment, which they still will have for a long time to come, but they're obviously trying to, how can I take costs out? How can I optimize? How can I make this even more efficient?

So then the money I'm saving there, I can then, for example, invest into modernization. How do I get my legacy virtualization platform, how do I get this more modernized and get this on the road to cloud native? Okay?

Yeah. Maybe running VMs on containers side by side on the same platform. Or how do I get straight with new projects into complete cloud native area, be it AI or not.

So with SUSE, we are playing in all of these three areas. We can help customers literally taking cost out on the, call it legacy, on the traditional, let's say, data center environments, through more efficient multi-Linux management or taking over support of all the Linuxes or the competitor Linux which are out there as well. So we can also take over support- Yes ...

from Red Hat to, again, take cost out or help migrating and modernizing your virtualization layer or you know what's going on in the market, that the market leader in virtualization is making it painful for customers, where they are now they all mainly think about, oh, how can I get out of that lock-in situation? Okay? So also there helping them to modernize and freeing up costs, so that then you can spend it on the new cloud native things.

The same time also now with the hardware situation is when you look back, open source, especially also Linux, has been from day one actually much better in the utilization of resources. Again, much more efficient, okay? Yeah.

So you get much more juice out of your hardware. You can run old hardware much, much longer. So also this now is probably also an angle to say if hardware costs are exploding, if I suddenly get, whatever, 10%, 20% more out of my existing hardware- It's a big difference ...

it's a big difference. Yeah. So that's also something which now people also look at it, okay, how can I get a less resource-consuming infrastructure in place to get their benefit?

I think that's going to be a big thing we're going to see in AI too because- Yep ... yeah, we were talking earlier about tokens- Yeah ... and stuff like this.

I think right now everyone's rushing headlong, let's see what I could do. I'll worry about the tokens. The next phase will be an efficiency phase.

Yeah. What do I really need AI for? Right?

When am I going to use AI and when not? When am I going to use agentic versus generative? Yeah.

Because agentic burns a lot more tokens. I think we're going to see that this AI factory- Yeah ... thing you got going on, you're going to see that play out in real time, real world.

Yeah. You mentioned, or in the keynote today they mentioned 59%, 60% of- Yeah ... majority, clear majority, companies are looking in terms of AI at some sort of hybrid- Yeah ...

AI model, right? Because when I hear you talk about the hardware crunch, isn't cloud a better model, or at least short term? Again, for sure, let's say the hyperscalers are dealing a little bit better with this hardware shortage.

They have just such a scale. Right. Okay?

They have also different purchasing power and so on, so they have less of that issue than an individual enterprise. I think you're seeing some of these building- Yeah ... their own chips.

Yeah. Building their own hardware. So it is for sure definitely is an option.

At the same time, we all know cloud is great for many use cases, but for certain things which you run very stable, you're very predictable, cloud is not always the most cost-efficient setup. No. Okay?

Where relatively- It never claimed to be. Yeah. " But obviously bursting, new things, spinning up quickly, hundreds of servers, obviously this is beautiful in the cloud.

Then the next question is, now we're talking about AI, okay. AI without data does not do much. Okay?

So, and just using data which is publicly available does a lot, but obviously you want to use it on your own data. Now, do I, as an enterprise customer, want to give, let's say, all my ERP data, everything what I have, or all my detailed SAP data, do I just want to get this all in the cloud, run all my AI an- an- analytics kind of in the cloud? First of all, gut feeling wise, it's really good if everything is out there.

It's really my data. Plus, then, if you run all these analytics out there, what does it do to the price? So what we are seeing is that that's why this hybrid setup- That's why hybrid is preferred ...

customers will, certain sets of data, they will say, "I will always keep," for example, on premise. Okay, or truly, let's call it private. Okay?

Mm-hmm. Use certain logic in the cloud, but then augment it obviously with my own data and run certain models and still locally. So that's why this hybrid setup is important, and therefore it's important to have an infrastructure which allows you to easily s- move things also a little bit back and forth.

Okay? So it's not an either/or. It's fluid and depending on the situation.

Maybe I do my proof of concept clearly completely in the cloud and run all the pilots. But if I say, "This is now a production, real, I want to do this really in production," I have its predictable workload. I maybe say I want to move it into my own four walls.

Okay? But now I don't want to re-architect the software and so on. Need a consistent container platform, move it with a consistent user interface, whatever.

Then you move it maybe from a hyperscaler Kubernetes platform to whatever non-premise platform, Kubernetes platform, or vice versa, okay? Absolutely. Or vice versa.

It's the world we live in. Exactly. So let me ask.

A theory I always had, I've founded four or five companies in my time. If I know the economy is bad, I'll plan for a bad economy. If I know the economy is good, I'll plan for a good economy.

The worst thing is uncertainty. Yeah. That you can't plan for.

Yeah. And obviously we have right now quite uncertain times, but overall, open source always, I would say, could deal with a recession or budget constraints environment much better- Better ... than others because open source solutions have always been the more price-value oriented solutions- Right ...

and lower costs. So it helped a lot, and I myself, I lived through, the biggest experience was there back in the f- when the financial services crisis- Oh eight, oh nine ... in 2009 when Lehman Brothers buzzed.

I know very well back then at my prior company where there was a middleware solution in the Java space, which was open source, which was great, but nobody wanted to look at it because people said, "I have bigger fish to fry. " Keep doing. Then the crisis came, this changed overnight, and suddenly the adoption exploded- Blowed up ...

in the crisis. And then even when the things became better, people were not switching back. They suddenly say- No ...

" That's the lesson. They never go back. Yeah.

And that's where I think, again, that's where with open source-based solutions, it's a little bit easier to get through, but I still would say having recessions is not good for anybody. No. Okay?

Recessions never are. It's a- But at least you could plan. And I'm not saying we're going to have a recession.

Yeah. I'm not saying it. Actually, depending on Europe, Germany's already three years in a recession.

Yeah? Yeah. So much for your- I live in Germany, I can tell you.

Okay. Well, but that's the crazy thing about this AI is it promises such disruption. Yeah.

I think it's the ultimate chaos principle, you know? Yeah. We don't know what it's going to be.

We don't know what it's going to be worldwide, nationwide, or what have you, but it's going to disrupt. Yeah. Again, especially now with agentic, just the additional opportunities I think which are possible with agentic are there will be certain groundbreaking.

Just what you heard this morning, we're having now these MCP servers in pretty much throughout all our products. What does this mean? It pretty much is a setup that everything we have can be pretty much executed and managed through an agent.

Okay? Yeah, we're a small company. I'm about a month and a half into our agentic experiment.

Yeah. 25 people. We've got 72 different projects where we're running agents.

Everything from the workflow for these videos that we do- Yeah ... through to the websites, our sales process, operations. I will tell you firsthand, it turns the whole thing upside down.

Yeah. I was just discussing upstairs with the guys there on the Linux booth, just saying, again, whatever, if you take today a classic ratio of a Linux system administrator, kind of a one to 100 machine is probably a decent ratio, okay? Right.

I am certain with the proper agentic- 10x it ... that you do at least a 10x, that that one person can make- No doubt ... 1,000 machines.

Okay? So now if you have a customer, you have 1,000 systems, you have 10 sysadmins, suddenly, wow. That's kind of- That's game changing.

The agentic cost me also something, but obviously it's kind of game changing. It's coffee money. Yeah, okay.

It's coffee money. So, and I think there we will see, for sure, use cases which will be very eye-opening. Absolutely.

Werner, they're giving me the sign it's the hook here. It's the hook. I'm sorry.

I'd like to sit and talk to you all day. You didn't grill me at all. No, I figured we were going to have a conversation.

It was such an easy talk. They're telling me I got to end it. I'll give you the last word, though.

What do you want to share with our audience? Clearly take a very serious look at SUSE. We have really some very cool stuff.

It's not just cool tech. There's really cool tech which can truly make a difference, and choice happens at the end, and that's what we are providing. Thank you.

Thank you for coming on Techstrong TV. Thank you. Take care.

Hey, we've got a lot more coming at you from SUSECON today, so stay tuned. We'll be back in a little bit.