Opinion In some ways, IBM paying a cool $6.4 billion for HashiCorp makes perfect sense. HashiCorp's infrastructure-as-code (IaC) tool Terraform is very popular and would work well with Red Hat Ansible. And, yes, I've heard the joke about how if you put them together, you'd get "Terrible."

Seriously, though, Terraform and Ansible already sync together well. It's a natural pairing.

The business case is also clear. According to the business-to-business market analysis company 6Sense, Terraform has a 32.02 percent market share in the configuration-management category. Number two? Ansible, with 31.35 percent.

As IBM CFO Jim Kavanaugh said in IBM's last earnings call, "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."

I can also easily see other HashiCorp programs, such as its secrets manager Vault, the portable virtual software development platform creator Vagrant, and the machine image builder Packer, being incorporated into the Red Hat line. All good news, right? Wrong.

There's only one little, itty-bitty problem: HashiCorp abandoned its open source roots for all these programs. After HashiCorp dumped its use of the Mozilla Public License (MPL) for the semi-proprietary Business Source License (BSL) 1.1 for its once open source programs, some of their developers abandoned ship and launched open-source forks.

The most important of these is OpenTofu, the fork of HashiCorp's flagship program, Terraform. Despite HashiCorp's efforts to torpedo the fork, OpenTofu, with the backing of the Linux Foundation, has taken off with both developers and customers.

Its first release, OpenTofu 1.7, comes with end-to-end encryption and numerous other valuable features. That's in no small part because many top Terraform developers moved to the fork. If you want the newest and best IaC tool, you probably want OpenTofu.

OpenTofu, I might add, isn't the only HashiCorp open-source fork getting traction. Vault's open-source twin OpenBao, opened its doors last December.

So, tell me again, exactly what IBM is getting for its billions? The technology's open. Why pay for it when it's only a free download away?

Terraform's business savvy? Please. The BSL move ticked off developers and customers alike. After its BSL switch, HashiCorp's stock hit a record low of $21.11, down 22 percent after its October 2023 earnings call.

Still, HashiCorp really wanted to get bought, and from that viewpoint, its recent business moves have been a success. Its executives and stockholders must be laughing all the way to the bank. For IBM? Well, that's another story.

Immediately after IBM confirmed its plans to acquire HashiCorp and reported lowered-than-expected quarterly earnings, IBM shares dropped over 8 percent in extended trading. As I write this, IBM's stock has continued to hover at about that same price.

In short, the market thinks this was a bad deal.

So, what happens next? Good question. If all goes well with the contract, and I see no reason why it wouldn't, the deal will be closed in 2024's fourth quarter.

But, there's more to this than just another business deal. OpenTofu co-maintainer Sebastian Stadil told The New Stack, "A lot of [OpenTofu] folks were puzzled about what exactly IBM intends to do, beyond all of the marketing speak. We're hopeful that IBM understands open source better than HashiCorp does."

Stadil also said IBM and OpenTofu have been talking since the deal was announced. So, does that mean the HashiCorp programs will return to their original licenses? We don't know.

I hope they do. As Stadil said, "Nobody likes split communities. Nobody likes fragmentation of efforts. So we would welcome [an open-source] Terraform." Many developers would, and I would, too.

If things stay as they have been with the relicensed programs, IBM's reputation as an open source supporter, already damaged by Red Hat's recent Red Hat Enterprise Linux (RHEL) source code restrictions, will suffer even more. And, that will be rotten news for both IBM and open source. ®

https://www.theregister.com//2024/05/10/opinion_column_ibm_hashicorp/