---
title: "Analysts say this is why IBM is spending $6.4B on HashiCorp"
type: "News"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/news/202862337.md"
description: "HashiCorp is known for its infrastructure-as-code tool Terraform, which is used to provision cloud and on-premises resourcesIBM execs said the deal will extend the company’s hybrid cloud capabilitiesAnalysts said the deal is likely an attempt by IBM to extend its market reach and fill in gaps IBM found in its Ansible platformIBM isn’t messing around with the hybrid cloud. The company just dropped a cool $6."
datetime: "2024-04-26T01:52:41.000Z"
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  - [en](https://longbridge.com/en/news/202862337.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/202862337.md)
---

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# Analysts say this is why IBM is spending $6.4B on HashiCorp

Source: Fierce-network

HashiCorp is known for its infrastructure-as-code tool Terraform, which is used to provision cloud and on-premises resources

IBM execs said the deal will extend the company’s hybrid cloud capabilities

Analysts said the deal is likely an attempt by IBM to extend its market reach and fill in gaps IBM found in its Ansible platform

IBM isn’t messing around with the hybrid cloud. The company just dropped a cool $6.4 billion to scoop up Terraform creator HashiCorp in a bid to build on the hybrid cloud capabilities already offered by its Red Hat brand.

Analysts told Fierce Network that in addition to plugging holes in its Ansible platform, the deal will also help IBM expand its addressable market and capitalize on HashiCorp's technology in a way the latter hasn't done on its own. They also noted the deal gives IBM the power to undo HashiCorp's controversial move last year to adopt a more restrictive licensing framework for its technologies.

During an earnings call on Wednesday, IBM CFO Jim Kavanaugh said “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."

He added “We are well-positioned to drive growth for HashiCorp by leveraging IBM's enterprise incumbency and global reach. With 70% of the revenue today coming from the U.S., the opportunity to scale HashiCorp across IBM's operations in 175 countries is significant.”

The deal is expected to close by the end of this year.

Hashi-who?

While it may not quite be a household name like IBM is, HashiCorp is well known for its infrastructure-as-code tool Terraform, which is used to allocate and adjust cloud and on-premises resources. It also offers products for workload orchestration (Nomad), a developer platform (Waypoint) and a series of security tools (Vault, Boundary and Consul).

Two days before the acquisition, HashiCorp debuted The Infrastructure Cloud, which combines its infrastructure and security products with the HashiCorp Cloud Platform to provide a unified platform for cloud management.

IBM CEO Arvind Krishna noted on the call that HashiCorp’s products have “wide-scale adoption in the developer community,” having been downloaded over half a billion times and used by more than 85% of Fortune 500 companies.

That said, Kavanaugh noted only a quarter of HashiCorp customers bring in more than $100,000 in annual recurring revenue, leaving IBM plenty of runway to upsell and grow the business.

Analyst views

From IBM's perspective, Gartner VP Sid Nag told Fierce the motivations for the deal are clear. First, IBM is looking to flesh out the functionality of its Ansible platform, and what better way to do that than with technology from its primary competitor?

Second, he said, IBM is looking to expand its market reach and revenue potential. By acquiring HashiCorp, it not only gains HashiCorp's customers but can in turn sell HashiCorp's technology to its own sprawling enterprise base.

Looking deeper, though, he added the deal is "another interesting vector in terms of how successfully has IBM monetized the Red Hat acquisition." It seems likely that IBM discovered gaps in Red Hat's Ansible platform that were preventing it from winning deals. Buying HashiCorp, he said, augments Ansible's capabilities and helps fill those holes.

What about HashiCorp's motivation?

At first glance, it's not entirely clear why a public company with a widely adopted technology would sell at all, much less to IBM, which is pretty much its top competitor in the provisioning market.

But in a note to investors, Bank of America Securities' Analyst Wamsi Mohan observed that HashiCorp's "growth has been declining," but added IBM could "drive cost synergies and drive rev growth across its larger customer base."

So, what happened to HashiCorp?

AvidThink Founder Roy Chua told Fierce that what Krishna said is true: HashiCorp indeed "had a strong foothold in the development and DevOps communities — at least until the whole business source license (BSL) debacle and the creation of OpenTofu under the Linux Foundation."

In August 2023, HashiCorp decided to transition from a Mozilla Public License to a Business Source License framework. The company said at the time the move was meant to give it more control over commercialization of its open source technology. Users, however, weren't thrilled with the change and the Linux Foundation created a Terraform fork called OpenTofu two weeks later.

"I've felt that HashiCorp wasn't fully capturing the value it created, given how dependent so many DevOps and SW teams were on their products and using them for free," Chua said. "If they had executed a Docker-type pivot as led by Scott Johnston and his team, I'm confident they would have captured a lot more revenue and avoided this acquisition."

With IBM taking over the wheel, "We'll all be watching to see if IBM reverses the BSL decision," Chua said. He noted IBM recently led the incubation of a different Linux Foundation project called OpenBAO which was a fork of HashiCorp's Vault, in an apparent move to signal displeasure with the BSL move.

IBM earnings

The news was announced alongside IBM’s Q1 2024 earnings. Consolidated revenue inched up 1% year on year to $14.5 billion. Software revenue rose 5.5% to $5.9 billion, offsetting flat consulting revenue of $5.2 billion and infrastructure revenue which slid 1% to $3.1 billion.

Within the software segment, Red Hat revenue was up 9%, automation rose 13% and data and AI increased 1% but security revenue fell 3%. The company did not provide breakout figures.

At press time, IBM stock (IBM • NYSE) was trading at $167.85, down 8.84%.

### 相关股票

- [HashiCorp (HCP.US)](https://longbridge.com/zh-CN/quote/HCP.US.md)
- [IBM (IBM.US)](https://longbridge.com/zh-CN/quote/IBM.US.md)

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