IBM wisely moved away from trying to be a pure-play cloud infrastructure provider years ago, realizing it could never compete with the big three – Amazon, Microsoft and Google. Since then, the company has helped IT departments manage complex hybrid environments and leveraged its financial strength to acquire a portfolio of high-profile companies.
It started with the $34 billion acquisition of Red Hat in 2018, continued with the Apptio acquisition last year, and continued on Wednesday when the company announced it would acquire cloud management provider HashiCorp for June 6 .4 billion US dollars.
With HashiCorp, Big Blue gains a suite of cloud lifecycle management and security tools and a business that is growing significantly faster than any of IBM’s other companies. Although revenue is small by IBM standards – $155 million last quarter, up 15% year over year. That still makes it a healthy and growing company for IBM to add to its growing inventory of hybrid cloud tools.
HashiCorp made headlines last year when it changed the license of its open source tool Terraform to be more business-friendly. The community that helped build Terraform wasn’t happy with this and responded by introducing a new open source alternative called OpenTofu. HashiCorp recently accused the new community of abusing Terraform’s open source code when creating the OpenTofu fork. Now that the company is part of IBM, it will be interesting to see if they continue with this line of thinking.
It’s worth noting that Red Hat also made headlines last year when it changed its open source license terms, which also caused consternation in the open source community. Perhaps these companies are a good fit, both from a software perspective and because of their changing views on open source.
Just this week, the company unveiled a new platform concept with the release of Infrastructure Cloud, a concept that should fit well into IBM’s hybrid cloud product catalog. While they didn’t add much functionality, they unified the offerings under a single umbrella, making it easier for sales and marketing to present them to customers.
Treating HashiCorp similarly to Red Hat would allow the company to maintain its independence within the IBM product family. But AVOA, a research firm led by former CIO Tim Crawford, says the company would be wise to remain neutral.
“My reservation would be if IBM were to move away from Hashicorp’s neutral stance on working with multiple cloud providers and focus on IBM Cloud. “I suspect this would not be the case as IBM has recently shown that they are more open to other cloud providers,” Crawford wrote in a recent blog post.