DMR News

Advancing Digital Conversations

IBM Acquires HashiCorp for $6.4 Billion, Expanding Its Hybrid Cloud Portfolio

ByHuey Yee Ong

Apr 25, 2024
IBM Acquires HashiCorp for $6.4 Billion, Expanding Its Hybrid Cloud Portfolio

IBM Acquires HashiCorp for $6.4 Billion, Expanding Its Hybrid Cloud Portfolio

IBM has announced its acquisition of cloud management vendor HashiCorp for $6.4 billion. This acquisition adds to IBM’s series of strategic purchases aimed at enhancing its hybrid cloud capabilities, following previous acquisitions like the $34 billion Red Hat buy in 2018 and Apptio last year.

HashiCorp, known for its cloud lifecycle management and security tools, reported $155 million in revenue last quarter, a 15% increase year-over-year. This acquisition aligns with IBM’s ongoing strategy to support IT departments in managing complex hybrid environments and to position itself strongly within the hybrid cloud market.

IBM’s transition away from being a pure cloud infrastructure vendor has been strategic, focusing instead on sectors where it can leverage its strengths. By acquiring HashiCorp, IBM not only gains advanced technology that’s growing faster than its other ventures but also boosts its portfolio with tools that are essential for modern hybrid cloud environments.

IBM CEO Arvind Krishna highlighted the synergy between IBM’s existing capabilities and HashiCorp’s offerings, emphasizing that this merger will fortify IBM’s hybrid cloud platform, particularly for applications in the AI era.

HashiCorp’s influence extends beyond its direct business impacts. Last year, it altered the license of its open-source tool, Terraform, to be more company-friendly. This led to the dissatisfied community creating a competing open-source project, OpenTofu. This issue of open-source licensing is not new within IBM’s acquisitions, as Red Hat also faced backlash for similar reasons. The alignment in their approaches to open-source policies might suggest a coherent strategy post-acquisition.

Additionally, IBM introduced a new infrastructure concept called the Infrastructure Cloud just this week. This platform aims to consolidate IBM’s offerings under a unified framework, simplifying the presentation of its hybrid cloud solutions to customers. The integration of HashiCorp could further enhance this new platform, providing comprehensive tools for cloud management.

Regarding the future integration of HashiCorp within IBM, there are speculations about maintaining HashiCorp’s operational independence similar to Red Hat’s treatment. Tim Crawford of AVOA suggests that IBM should preserve HashiCorp’s neutral stance in dealing with multiple cloud providers rather than prioritizing IBM Cloud exclusively. This would align with IBM’s recent trend of fostering openness with various cloud technologies.

HashiCorp’s journey began in 2012, and before going public in 2021, it had raised almost $350 million. The acquisition by IBM marks a significant milestone in its growth trajectory, potentially influencing the broader hybrid cloud market’s dynamics.

Related News:

Featured Image courtesy of Peter Kneffel/picture alliance via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

Leave a Reply

Your email address will not be published. Required fields are marked *