IBM acquires HashiCorp for $6.4 billion, moving further into hybrid cloud management

IBM realized years ago that it would never be able to compete with the big three: Amazon, Microsoft, and Google, and wisely moved away from trying to become a pure cloud infrastructure vendor. He then transitioned into helping IT departments manage complex hybrid environments and used his financial clout to acquire a portfolio of high-profile companies.

It started with the $34 billion acquisition of Red Hat in 2018, continued with last year’s acquisition of Apptio, and continued Wednesday when the company announced it would acquire cloud management vendor HashiCorp for $6.4 billion.

Thanks to HashiCorp, Big Blue has a set of cloud lifecycle management and security tools and a company that is growing significantly faster than any other business at IBM. Revenue is small by IBM standards, but it was $155 million last quarter, up 15% from a year ago. That makes it a healthy and growing business for IBM, along with a growing stable of hybrid cloud tools.

IBM CEO Arvind Krishna certainly recognized the value of this article for his company’s hybrid strategy and threw in an AI reference just in case. “HashiCorp has a proven track record of helping clients manage the complexity of today’s infrastructure and application sprawl. By combining IBM’s portfolio and expertise with HashiCorp’s capabilities and talent, we are ready for the AI ​​era. A comprehensive hybrid cloud platform will be built that is designed with

HashiCorp made headlines last year for changing the license for its open source Terraform tool to something more friendly to the company. Not satisfied with this, the community that helped build Terraform responded by launching a new open source alternative called OpenTofu. HashiCorp recently accused a new community of abusing his Terraform. open source code When you create an OpenTofu fork. It will be interesting to see if the company continues to pursue this idea now that it is part of IBM.

It’s worth noting that Red Hat also made headlines last year for changing its open source licensing terms, which also shocked the open source community. Perhaps these companies will be a good fit, both from a software perspective and from a changing perspective on open source.

Just this week, the company introduced a new platform concept, infrastructure cloud, this concept should fit well into IBM’s hybrid cloud product catalog. It didn’t add much in terms of features, but it did consolidate services under one umbrella, making it easier for sales and marketing to present to customers.

If the company treated HashiCorp like Red Hat, it would maintain its independence within the IBM product family. AVOA, a research firm run by former chief information officer Tim Crawford, said the company would be wise to remain neutral.

“My reservation is whether IBM will move away from Hashicorp’s neutral position of working with multiple cloud providers and focus on IBM Cloud. I suspect this is not the case, as it indicates more openness,” Crawford wrote. Recent blog posts.

HashiCorp was founded in 2012 and raised approximately $350 million before going public in 2021.