IBM made a strategic shift away from solely focusing on cloud infrastructure to instead helping IT departments handle complex hybrid environments. Their approach involves acquiring notable companies using their substantial financial resources.
This shift began with the $34 billion purchase of Red Hat in 2018, followed by acquiring Apptio last year, and most recently, their announcement of buying cloud management vendor HashiCorp for $6.4 billion.
By acquiring HashiCorp, IBM gains access to advanced cloud management and security tools. HashiCorp is one of IBM’s fastest-growing businesses, with revenue reaching $155 million last quarter, representing a 15% increase from the previous year. Despite its modest size compared to IBM’s overall revenue, HashiCorp adds significant value to IBM’s expanding portfolio of hybrid cloud solutions.
IBM’s CEO Arvind Krishna believes that HashiCorp’s expertise will greatly benefit their hybrid cloud strategy. By combining IBM’s resources with HashiCorp’s capabilities, they aim to develop a robust hybrid cloud platform suited for the AI era.
HashiCorp faced some backlash from the community after modifying the license of its Terraform tool. In response, a group created an alternative called OpenTofu. HashiCorp accused this group of using their code inappropriately. With IBM now in the picture, it remains to be seen how this situation will develop.
Last year, Red Hat also faced criticism for altering its open source licensing terms, causing tension in the open source community. It is possible that IBM and HashiCorp, both navigating changes in open source dynamics, could find common ground and complement each other well in their software endeavors.
Earlier this week, the company rolled out a new platform called the Infrastructure Cloud, which is designed to complement IBM’s hybrid cloud lineup. Even though no new features were introduced, this move consolidated all the offerings into one cohesive platform. This will make it simpler for sales and marketing teams to showcase the product to customers.
HashiCorp, a company founded in 2012 and raised almost $350 million before going public in 2021, is known for its neutrality in working with multiple cloud providers. There are discussions around IBM potentially treating HashiCorp similarly to how they handle Red Hat, maintaining its independence within IBM’s product portfolio.
Tim Crawford, from AVOA, a research firm, suggests that it would be wise for IBM to keep HashiCorp’s neutral stance intact rather than pushing solely for IBM Cloud. Crawford believes that IBM’s recent openness to working with various cloud providers indicates that they may continue to support HashiCorp’s multi-cloud approach.