IBM has officially wrapped up its acquisition of HashiCorp for $6.4 billion, 10 months after first announcing the deal. This move targets the increasing complexity that companies face in managing multicloud and hybrid cloud setups, especially as AI applications demand constant workload shifts and quick scaling.
Starting today, businesses can access HashiCorp’s automation tools like Terraform and Vault through IBM’s hybrid cloud platform. This integration allows customers to automate tasks related to infrastructure provisioning and security management seamlessly across their systems.
By leveraging Terraform, IBM aims to improve the performance of several products in hybrid environments. This includes the Red Hat Ansible Automation Platform, which automates application configurations and middleware deployments, as well as enhancements for IBM Z mainframe software. HashiCorp Vault, a tool for password and encryption key management, will also be available across hybrid clouds using Red Hat’s OpenShift, a container-based application platform.
Instead of merging with Red Hat, which IBM acquired for $34 billion in 2019, HashiCorp will function as a division of IBM Software. Rob Thomas, IBM’s senior vice president and Chief Commercial Officer, stated that businesses around the world want to deploy modern apps that require large-scale automated cloud infrastructure. He emphasized IBM’s commitment to investing in HashiCorp’s technologies and tapping into its vast developer community to enhance every data center.
HashiCorp’s CTO and co-founder, Armon Dadgar, expressed excitement about joining IBM, highlighting their shared vision for enabling hybrid infrastructure for large enterprises. He noted the deep investments in research and development that will facilitate the creation and scaling of next-gen applications.
On the regulatory side, the U.K.’s Competition and Markets Authority has approved the transaction, deeming it unlikely to harm competition. This reflects the country’s push for innovation to attract tech investments. The U.S. Federal Trade Commission also gave the green light after a series of antitrust investigations that had delayed the deal’s completion timeline.
However, IBM and HashiCorp encountered hurdles during the acquisition process. In June, a HashiCorp investor filed a lawsuit alleging that the acquisition primarily benefited board members at the expense of shareholders. Notably, this lawsuit was withdrawn just two days later.
Following the announcement, HashiCorp’s stock rose by 4%, rebounding from earlier declines in 2023, which stemmed from the controversial decision to change the licensing of Terraform. By moving from an open-source license to the more restrictive Business Source License, HashiCorp faced backlash from parts of the open-source community, prompting the creation of OpenTofu, a fork of the original Terraform code overseen by The Linux Foundation. Interestingly, this licensing change may have made the acquisition more appealing to IBM, allowing for better integration and monetization of the technology within its ecosystem.
