IBM has acquired Terraform provider HashiCorp for $6.4 billion

IBM has acquired HashiCorp, a company specializing in cloud business tools, for $6.4 billion. Citing insiders, Reuters expects IBM's next $1 billion acquisition to take place as early as April 23, 2024. ShownMeanwhile, he came Official confirmation from Big Blue.

advertisement

The news causes some surprise on the scene. However, since its acquisition of Red Hat in 2018, IBM has been on a regular buying spree: just last year, the company bought Apptio for $4.6 billion – a platform provider for managing business expenses and assets.

Synergy effects for cloud business

With the Acquisition of HashiCorp IBM says it aims to create an end-to-end hybrid cloud platform. HashiCorp brings with it the right resources and skills to exploit synergy effects in specific growth areas around Red Hat, Watsonx, data security, IT automation and consulting.

IBM primarily points to HashiCorp's services and tools, which are important to its cloud business – including in particular Terraform and Vault. Terraform is one of the most popular infrastructure tools that can be used to automatically build, manage, and tear down server and network infrastructure – regardless of the actual infrastructure underneath. However, with the license change in the direction of Business Source License (BSL) 1.1 last year, HashiCorp has caused a lot of turmoil in the open source camp.

Between open source and business

In the wake of the IBM acquisition, some voices in the open source community are hoping for or even demanding a return to free licenses. Kelsey Hightower, co-creator of the Kubernetes container orchestration platform, I spoke spontaneously on Xwith a recommendation to IBM to convert all licenses of HashiCorp products to an OSS Apache 2.0 license.

However, given IBM's traditional focus on enterprise business, such considerations may not have been at the forefront of the acquisition process.

HashiCorp's valuable treasures: Vault, Terraform & Co.

Moreover, HashiCorp represents more than just Terraform. Easily managing passwords and similar secrets has been an important topic since the mid-2010s, and has become even more important as a result of zero trust initiatives. with Basement HashiCorp provides IT managers with a custom platform that also supports a variety of software manufacturers and can be used independently of the cloud provider in question. According to many experts, it is these capabilities that make Vault HashiCorp a true jewel in the crown.

Vault may have made HashiCorp particularly attractive to IBM from a financial perspective, says Soren Martius, CEO of Terramate — a platform for managing Terraform and OpenTofu — In his short analysis on LinkedIn.

in the last Financial figures published in March 2024 HashiCorp was able to announce a significant increase. Sales in the fourth quarter of fiscal year 2024 were $155.8 million (up 15 percent from the same quarter last year), and total sales for 2024 increased 23 percent to $583.1 million. However, this compares to a GAAP net loss of $31.6 million for the fourth quarter.

The debate over Terraform and the Terraform fork OpenTofu, adopted by the Linux Foundation, may have contributed to the fourth-quarter losses, especially since services make up the lion's share of HashiCorp's business. However, as part of IBM's acquisition, HashiCorp will likely gain access to Big Blue's large network of enterprise customers and thus unlock further growth. However, it remains to be seen what specific consequences the acquisition will have for HashiCorp, its products and customers, as well as for the open source community.

(a map)