News

IBM To Acquire Open Source Software Veteran HashiCorp

• By Gladys Rama
• April 24, 2024

IBM is bolstering its hybrid and multicloud bona fides in a big way.

In a deal announced Wednesday, Big Blue said it plans to acquire cloud infrastructure and management company HashiCorp for an estimated $6.4 billion, or $35 per share. Both companies' boards have already approved the deal, which is expected to close by the end of this year, pending regulatory and shareholder approvals.

Founded in 2012, HashiCorp cut its teeth as a maker of open source automation software, though it made the decision last year to switch from the Mozilla Public License v2.0 to the Business Source License, putting limits to the free use of its products. Predictably, the move was met with debate and criticism.

That hasn't made HashiCorp less attractive to buyers, however. As IBM notes in the announcement of the deal, HashiCorp products collectively had over 500 million downloads in its fiscal 2024. "HashiCorp's offerings have widescale adoption in the developer community and are used by 85% of the Fortune 500," per IBM.

HashiCorp's flagship Terraform product promises to enable workflow automation across clouds and datacenters via an infrastructure-as-code package. Other products include the Waypoint developer platform and the Nomad orchestration solution, as well as security solutions Vault, Boundary and Consul.

HashiCorp's portfolio will help IBM cultivate a "comprehensive end-to-end hybrid cloud platform built for AI-driven complexity," particularly for enterprises, Big Blue said in the release.

IBM singled out a few specific areas in its business that stand to benefit from the acquisition.

"HashiCorp is expected to drive significant synergies for IBM, including across multiple strategic growth areas like Red Hat, watsonx, data security, IT automation and Consulting," the company said. "For example, the powerful combination of Red Hat's Ansible Automation Platform's configuration management and Terraform's automation will simplify provisioning and configuration of applications across hybrid cloud environments."

The two companies positioned the deal as particularly timely, given how much the adoption of both cloud and AI is making workloads and infrastructures more difficult to manage.

"Enterprise clients are wrestling with an unprecedented expansion in infrastructure and applications across public and private clouds, as well as on-prem environments. The global excitement surrounding generative AI has exacerbated these challenges and CIOs and developers are up against dramatic complexity in their tech strategies," said IBM CEO Arvind Krishna in a prepared statement. "HashiCorp has a proven track record of enabling clients to manage the complexity of today's infrastructure and application sprawl."