HashiCorp lost its way

IBM acquires HashiCorp. End of an era?

Yesterday, February 27, 2025, it was announced that IBM had finished acquiring HashiCorp. HashiCorp is now an IBM company. In many ways, it feels like the end of an era.

To me, HashiCorp felt like the dream. Not working there, but building the company. A smart and innovative software developer builds a successful developer tools company, hits a double digit billion dollar valuation at one point, and retires to learn to fly airplanes.

The vibe on Hacker News does not feel like a celebration. Being swallowed by IBM is not the victory people would have predicted when HashiCorp IPO’d.

IBM and developer tools

In the developer world, IBM does not come to mind when we think of tools we love. Despite IBM’s work in open source, it feels like a company built for executives by executives.

IBM has done a great job of maintaining its value over the years. It may not be as exciting as a FAANG stock, but as of this writing, it still has a market cap of a quarter trillion dollars. How will having access to all those resources impact HashiCorp?

HashiCorp lost its way

The truth is, while I respect all of the work HashiCorp has done, Terrateam would not exist as it does right now without HashiCorp, I think most people feel HashiCorp lost its way a while ago.

Switching to Resources Under Management (RUM) pricing felt like the first attempt to squeeze money out of customers without giving them a better experience.

Then, rather than competing on innovation, HashiCorp gave up on its open source roots, the thing that made it the dominant player it became, and switched its products to the source-available BUSL license. That opened a lot of people’s eyes to the new reality. HashiCorp was trying to win by shutting down competition instead of building something better.

Open source stepped in

A lot of us competing with HashiCorp got together and forked Terraform, creating OpenTofu, a drop-in replacement. OpenTofu has been adding features while keeping compatibility with Terraform. It is part of the Linux Foundation, making it a true community-driven open source tool.

Terraform is not the only HashiCorp tool that got forked. OpenBao was forked from Vault.

Will HashiCorp start innovating again?

Now that it is part of IBM, will HashiCorp start innovating again? I am skeptical. That is just not what IBM is known for, and HashiCorp did not have a culture of innovation at the time of the acquisition.

What this means for Terrateam

At Terrateam, we find the acquisition interesting from a historical perspective, but it never really felt like it impacted us. Our product has always taken a different approach to managing infrastructure than HashiCorp.

If you love the Terrateam product, then you probably would not be a devout Terraform Cloud user anyway. It would take a huge pivot to compete with the workflow Terrateam gives users.

Terrateam has always been dedicated to fair, transparent, and honest pricing. Combined with recently going open source, we are just on a different path than either HashiCorp alone or HashiCorp under IBM.

I think that in its attempt to capture more value, HashiCorp has given up its position as a leader in developer tooling. Yes, its tools will be used for years to come, but the next big tool won’t come from them and the next great features in Terraform and Vault space won’t come from them. The king is dead, long live the king’s legacy.