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After weeks of rumors and speculations, the sale of HashiCorp is finally official. The buyer is IBM, and the deal reportedly costs $6.4 billion, or $35 for each of HashiCorp’s shares. IBM is acquiring HashiCorp at a 42.6 percent premium over the latter’s April 22 closing stock price, suggesting serious interest in Terraform and the IaC ecosystem it has created.

IBM has stated that the HashiCorp acquisition is part of its strategy to go wider with the company’s cloud offerings. The company has been reinforcing its cloud business in view of the increasing demand for the storage and processing of enormous amounts of data, especially with the staggering prominence of AI across different industries.

How does this development affect the thriving but beleaguered ecosystem surrounding Terraform, HashiCorp’s flagship product? Is it good for Terraform users, or is it going to introduce major changes that would make Terraform and its associated tools less viable? Here are some key discussions worth examining as control over Terraform changes hands.

Impact on associated tools and systems

For now, it is safe to say that IBM’s acquisition of HashiCorp has minimal impact on Terraform’s devops ecosystem. The main reason for this is the multi-platform and multi-environment nature of most Terraform tools and solutions.

Last summer, HashiCorp changed Terraform from being open source to a Business Source License (BUSL), which turned off many IAC teams. More recently, Terraform’s pricing model changed from being based on team size to being based on resources under management (RUM), prompting further frustrations. As a result, alternatives that offer less siloed capabilities have gained popularity.

Indeed, a quick review of the top Terraform tools reveals that most of them are designed to work with multiple platforms and systems. Policy-as-Code tool Open Policy Agent (OPA), for example, works with OpenTofu, the fledgling open-source Terraform alternative.

Meanwhile, the static code analysis tool Terrascan supports different platforms including Atlantis, GCP, and Kubernetes. Go library Terratest is compatible with Docker, Packer, and Kubernetes. The IaC orchestration tool Terramate works with OpenTofu, Pulumi, and CloudFormation.

Additionally, most advanced IaC management platforms can be used with Pulumi, OpenTofu, and AWS CF.

Terraform’s ecosystem of tools and solutions, then, is hardly dependent on Terraform itself as a foundation. The ecosystem’s applicability overlaps with other IaC platforms, making them highly resilient, and even if a considerable number of Terraform head elsewhere, the ecosystem continues to provide value.

Concerns over becoming too IBM-focused

One of the biggest concerns of Terraform users is the possibility that IBM will bind Terraform to its cloud products. The company may prioritize IBM Cloud integration and forego Terraform’s multi-cloud capabilities.

Also, IBM may integrate Terraform into its Red Hat business. As PivotNine analyst Justin Warren notes, subsidiary Red Hat is the biggest growth driver for IBM, so it makes perfect sense to put Terraform under it. To maximize revenues, IBM may decide to limit Terraform interoperability to IBM products and limit access to the source code to paying users.

Despite its reputation of being open-source-friendly, IBM has made some controversial decisions over its software licensing in the past. In mid-2023, the company announced that it would grant access to Red Hat Enterprise Linux’s source code only to paying customers. Users were certainly not thrilled by this development, and many have been vocal about their frustrations.

Continuing with these trends and further alienating the significant open-source devops community may be a sound business decision for IBM as far as its bottom line is concerned. However, if the negative sentiment snowballs, it could eventually turn into a revolt, and the open-source community’s backing was once a key factor in the growth and popularity of Terraform.

While Terraform’s devops ecosystem is unlikely to collapse altogether, it may shrink significantly in the years ahead as open-source adherents slowly drop support for Terraform and focus on thriving forks and other alternatives.

Increased Terraform adoption and beyond

Although there are concerns over the possible restrictions IBM may impose as it attempts to squeeze ROI from the HashiCorp acquisition, many believe that Terraform is in good hands with IBM. The buzz from Reddit, for example, is generally positive. The overall response is optimistic, with many developers sharing favorable comments about IBM as the acquiring entity.

The new owner is expected to introduce Terraform to more users by tapping into IBM’s existing and prospective customer base. This can mean more users and developer contributions to the Terraform IaC ecosystem, creating a more vibrant community that further encourages the use of the popular cloud provisioning tool. “We are well-positioned to drive growth for HashiCorp by leveraging IBM’s enterprise incumbency and global reach,” boasted IBM CFO Jim Kavanaugh during an earnings call in April.

A reversal to open-source licensing for Terraform may not happen anytime soon, though. While IBM will likely seek to aggressively attract more Terraform users, reverting to more user-friendly billing models also does not appear to be on the near-term agenda.

However, circumstances may convince IBM to compromise towards an open-source path. For one, OpenTofu co-maintainer Sebastian Stadil recently intimated that he is amenable to reconciling with Terraform if the latter returns to open-source licensing.

Stadil noted that nobody wants to deal with split communities and the fragmentation of efforts. He also revealed that IBM and OpenTofu were already in talks since the HashiCorp acquisition was announced. The details of these talks remain confidential, but Stadil did share that IBM has been helping OpenTofu with engineering and general support.

OpenTofu can be a formidable competitor, so “eliminating” it by switching back to open-source can be advantageous for IBM.

When it comes to Ansible, IBM’s competitor to Terraform, the consensus is that IBM wants synergy between these two similar products. Analysts suggest that IBM seeks to expand its market reach by presenting Terraform as an option for those who reject Ansible. Terraform will not be taking over Ansible, but it is still set to gain more users and expand its ecosystem with IBM’s backing.

Committing to an open ecosystem

IBM’s previous actions and statements indicate an inclination towards open-source solutions. Developers also tend to agree that IBM is among the Big Tech companies that are most supportive of open sourcing. The question, however, is whether or not inclination and support are enough to maintain Terraform’s user base and wider ecosystem.

It’s too early to know for sure how this will all play out, but Terraform’s new owner is in a good position to further advance the features, functions, third-party integrations, and developer community that fostered its growth and popularity.

Asim Rahal is an independent consultant who plans and executes IT security strategies and compliance practices across environments. An incurable evangelist of cloud security, data protection, and cyber risk awareness, Asim has been published in Dark Reading, TechTarget, and InfoQ.