HashiCorp joins IBM
IBM unveiled recently, through a blog post, an agreement to acquire HashiCorp, the company that develops tools, Vagrant, Packer, Hermes, Nomad and Terraform tools. The deal is valued at $6.400 billion and is expected to be completed by the end of this year., after receiving approval from HashiCorp shareholders and regulatory authorities.
It is expected that this transaction generates significant benefits for both IBM and HashiCorp as the acquisition includes a series of products for hybrid and multi-cloud infrastructure management, which aim to help customers deal with the growth and complexity of applications driven by artificial intelligence today.
It is mentioned that after completing the acquisition, HashiCorp will continue to operate normally, that is, it will continue under his own name, but as a separate division within IBM.
The acquisition of HashiCorp is expected to strengthen IBM's position in key areas such as IT process automation, data protection and consulting.
One of the notable synergies will be the combination of the configuration management capabilities of Red Hat Ansible Automation with the process automation capabilities of HashiCorp Terraform. This will lead to a new hybrid cloud solution that will simplify the delivery and configuration of applications in complex environments.
IBM mentions that one of the main reasons for the purchase of HashiCorp is to use its developments to create a comprehensive hybrid cloud platform with which it plans to develop tools for software lifecycle management, with support for a variety of cloud environments, both external and those implemented on IBM servers, and in addition, both IBM and HashiCorp are expected to obtain the following benefits:
- Improvement in Life Cycle Management: HashiCorp brings with it a wide range of security and infrastructure lifecycle management capabilities, which will enable organizations to automate their hybrid and multi-cloud environments efficiently.
- Boost in key strategic areas for IBM: The acquisition is expected to generate significant synergies for IBM, including in areas such as Red Hat, watsonx, data security, IT automation and consulting, thereby strengthening IBM's position in the market.
- Attractive Agreement from a Financial Point of View: The transaction is expected to be accretive to adjusted EBITDA in the first full year after closing, and to free cash flow in the second year, providing an additional financial boost to the acquired business.
- Expansion of the Fully Addressable Market: The combination of HashiCorp's offerings with IBM and Red Hat aims to provide customers with a platform to automate the deployment and orchestration of workloads across diverse infrastructure environments.
- Accelerated Growth Potential: The acquisition aims to accelerate HashiCorp's growth initiatives by leveraging IBM's world-class go-to-market strategy, scale and global reach. This will open new market and expansion opportunities for HashiCorp.
- HashiCorp Key Products: Among the notable products that HashiCorp provides are Terraform, which has positioned itself as the industry standard for infrastructure provision in hybrid environments, and Vault, which provides an additional layer of security with identity-based authentication.
It is worth mentioning that many hope after the acquisition there is some possibility of returning HashiCorp's projects to an open license, It is important to remember that initially these products were developed under the open MPL license, but in August 2023, they were transferred to the proprietary BSL 1.1 license, which limits their use in cloud systems that compete with HashiCorp products and services.
This license change was explained by the need to maintain funding for developments in the face of certain non-collaborative use practices by other companies in the field of cloud computing. As such there is still no information on whether there will be any changes from IBM and for now the HashiCorp projects will continue with BSL 1.1
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