How Terraform is evolving infrastructure as code

Last week I talked up OpenTofu—and for good reason. The Terraform fork has moved beyond being the darling of the infrastructure-as-code (IaC) community to becoming a real, if early, enterprise contender. However, in so doing, I inadvertently threw shade at the market leader, Terraform from HashiCorp. It’s worth remembering that while individual products or projects can move fast, industries tend to move slowly. We’re just a decade or so into the latest evolution of the IaC market, with tens of billions of dollars in play and an IT management market that is much more expansive than the IaC category. It’s this larger market that HashiCorp has been tackling, with a suite of services that complement Terraform and that will pair with IBM Red Hat products like Ansible.

Against this backdrop, open source challengers such as OpenTofu and Pulumi, or cloud heavyweights like AWS CloudFormation, are credible causes for concern, but HashiCorp is playing the long game and transforming itself into a strategic vendor that does more than IaC. Let’s take a look at its odds.

Telling a holistic story

Infrastructure as code is a way of declaring system resources as code, making it easier to ensure repeatability, auditability, and portability across software infrastructure. Terraform has become the bedrock for managing IaC, an essential tool for tens of thousands of organizations navigating the complexities of modern cloud deployments. Terraform’s influence is strong and growing within IaC and configuration management, but its presence is less pronounced in the (much) more expansive IT management software market.

That’s a good thing. It means there’s lots of room to grow. It also means there’s all sorts of competition.

Within the IaC space, Pulumi has emerged as a notable competitor by offering a developer-centric approach that allows infrastructure to be defined using familiar programming languages such as Python, Go, and JavaScript, as I’ve written. This resonates with development teams that might perceive Terraform’s HashiCorp Configuration Language (HCL) as an additional learning curve. For organizations deeply invested in AWS, AWS CloudFormation provides a tightly integrated and AWS-native IaC solution. And, as I wrote last week, OpenTofu has stormed onto the scene with an open source, community-driven, and increasingly innovative spin on IaC. None of these are simple challenges for Terraform.

But with the exception of AWS, other vendors are not matching HashiCorp’s more expansive approach to IaC. For example, HashiCorp has responded to these competitive pressures by emphasizing a comprehensive approach to infrastructure life-cycle management (ILM), viewing Terraform as a solution that spans the entire life cycle of infrastructure, from initial setup (day 0) to deployment (day 1) to ongoing management and security (day 2). This holistic perspective caters to the evolving needs of organizations as their cloud infrastructure matures.

HashiCorp also offers features like Terraform Stacks for managing complex multicomponent deployments, module life-cycle management to streamline upgrades and deprecations, and enhanced tagging for improved organization and governance within Terraform. Couple this with tight integration into other HashiCorp products such as Vault (secrets management), Consul (service discovery and connectivity), and Nomad (workload orchestration), and enterprises walk away with a more complete solution for managing and securing cloud infrastructure than they’d get from Terraform alone—or a competitive offering.

Customers are listening

This approach is working. BT Group, a leading telecommunications company, exemplifies how HashiCorp has blended its holistic product approach with key partners, in this case AWS, to meet customer demands that go beyond vanilla IaC. Working with HashiCorp and AWS, BT Group saw deployment times plummet from several days to just 10 minutes, facilitating the migration of 70 applications from their on-premises data center to AWS, resulting in improved scalability and significant cost efficiencies. BT Group didn’t just use Terraform; they also pulled in Nomad for application orchestration, Consul for service connectivity, and Vault for data security.

Other customers have used HCP Terraform to modernize their legacy applications, significantly decreasing the time required to provision new environments from weeks to hours. OXY reported a remarkable 90% improvement in developer productivity by leveraging Terraform, Packer, and Vault; Toyota successfully scaled its cloud onboarding processes using HCP Terraform and AWS Control Tower Account Factory for Terriform (AFT). Clearly there is room for up-and-comers like OpenTofu without disrupting Terraform’s continued success in the enterprise, given HashiCorp’s comprehensive approach to ILM.

What about IBM’s acquisition of HashiCorp? On paper, this strategic move could provide customers with a more comprehensive and integrated platform for managing their increasingly intricate hybrid and multicloud environments. There’s strong potential synergy between Terraform for infrastructure provisioning and IBM Red Hat’s Ansible for configuration management, further extending that ILM vision. And maybe IBM, which has a long history with open source, will make it easier for HashiCorp to revert to its original open source licensing.

Regardless, it’s unclear that the license is the primary determinant of HashiCorp’s success. Rather, being a one-stop shop for infrastructure provisioning and management will likely be the more enticing factor for enterprises that have more money than time. They just need stuff to work.

Navigating a cloudy future

Despite facing increasing competition and working a significant shift in its licensing model, HashiCorp’s Terraform remains the dominant force in the IaC market, supported by its robust feature set, extensive multicloud compatibility, and vibrant partner ecosystem.

It’s not that OpenTofu, Pulumi, and other open source options aren’t a threat. They are. But HashiCorp has evolved to support more complex enterprise requirements, making an attack on Terraform or any particular product less effective. HashiCorp’s strategic emphasis on the entire infrastructure life cycle, coupled with its continuous product innovation and commitment to security, positions it favorably to address the evolving needs of organizations in the cloud era.