IBM announced plans to acquire HashiCorp for $6.4 billion, aiming to expand its cloud-based software offerings to leverage the growing demand for AI-driven solutions. The transaction is expected to be completed by the end of 2024.
IBM's acquisition of HashiCorp establishes a comprehensive end-to-end hybrid cloud platform aimed at addressing the complexity of AI-driven solutions. By integrating the product portfolios and talent of both companies, customers will benefit from extensive application, infrastructure, and security lifecycle management capabilities.
HashiCorp will continue to operate as a division within IBM.
According to Stephen Elliot, Vice President at market research firm International Data Corp, "This is a wise move for IBM. They are acquiring a leader, and this will complement their existing product portfolio." Following the completion of the transaction, HashiCorp is expected to bring significant synergies to IBM, particularly in strategic growth areas such as Red Hat, Watsonx, data security, IT automation, and consulting.
IBM to Open Up HashiCorp Again
HashiCorp boasts over 4,400 customers, including Bloomberg, Comcast, Deutsche Bank, GitHub, JPMorgan Chase, Starbucks, and Vodafone.
"HashiCorp has a strong track record of helping customers manage the complexity of today's infrastructure and application scalability. Combining IBM's product portfolio and expertise with HashiCorp's capabilities and talent will create a comprehensive hybrid cloud platform designed for the AI era," said Arvind Krishna, Chairman and CEO of IBM.
HashiCorp's products have gained widespread adoption in the developer community, with 85% of Fortune 500 companies using their products. In HashiCorp's fiscal year 2024, their community products in the infrastructure and security domains were downloaded over 500 million times. The only issue has been the changes in their licensing over the past few years.
Some experts predict that IBM's open-source strategy may lead to HashiCorp reverting the BSL license change it made last year. Others suggest that HashiCorp may become another cog in IBM's wheel.
An Ideal Deal for HashiCorp as Well
Founded in 2012, HashiCorp believes that the adoption of cloud computing is still in its early stages. "By partnering with IBM, we will have the opportunity to help more customers achieve product innovation faster and continue to expand our practitioner community," said Armon Dadgar, Co-founder and CTO of HashiCorp.
By combining HashiCorp's products with those of IBM and Red Hat, customers will have a platform for automating the deployment and orchestration of workloads across evolving infrastructures, including hyperscale cloud service providers, private clouds, and on-premises environments.
"Our strategic focus is enabling companies to innovate in the cloud while providing a consistent approach to managing the cloud at scale. With the rise of multi-cloud and hybrid cloud, as well as the acceleration of today's AI revolution, the need for effective management and automation is critical," Dadgar said.
"I am very excited about this news and look forward to joining IBM to accelerate HashiCorp's mission and expand our products to a broader community of developers and enterprises," he added.
