When the acquisition closes later in 2024 HashiCorp will operate as a standalone subsidiary of IBM. Credit: nattul via Shutterstock.

In April 2024, IBM announced plans to acquire HashiCorp, a vendor whose Terraform platform the company says can help IBM clients automate cloud deployments.

HashiCorp’s catalog includes infrastructure lifecycle management and security lifecycle management, solutions that enterprises can use to automate hybrid and multi-cloud environments. This will extend IBM’s automation and multi-cloud management product set, which it currently delivers through the Red Hat subsidiary.

IBM executives were questioned about any potential overlap between HashiCorp’s solution set and Red Hat’s offerings; They said they were distinctly different capabilities.

HashiCorp delivers a record for the workflows necessary for hybrid and multi-cloud deployments, while the company’s flagship Terraform is popular with enterprises looking to automate cloud infrastructure provisioning, which is more closely associated with the initial cloud migration. IBM executives said that Red Hat’s Ansible software suite is much more closely associated with ongoing cloud management.

IBM acquisitions

The acquisition follows IBM’s $4.6bn deal to buy cloud financial management vendor Apptio in August 2023. The combined automation and management solutions could give IBM a bigger edge as organisations try to optimise both the performance of their multi-cloud infrastructures and the cost-efficiency of these environments.

However, big questions loom as HashiCorp has grappled with turning the Terraform into a money maker. To this end, last year HashiCorp moved Terraform from an open source to a Business Source License model. Not surprisingly, this was not a popular move among developers or partners.

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There are questions about how IBM might change Terraform’s licensing model as OpenTofu, an open source fork of Terraform, could also undercut Terraform’s sales.

The hope is that with the sales and technology development support, HashiCorp will be able to expand its revenues and profits. Like Red Hat, when the acquisition closes later in 2024 HashiCorp will operate as a standalone subsidiary of IBM.