Everything you need to know about IBM’s HashiCorp acquisition

IBM logo displayed at their pavilion during the Mobile World Congress in Barcelona, Spain, on February 28, 2024
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IBM has revealed plans to acquire HashiCorp in a deal valued at more than $6 billion, marking a significant expansion of its hybrid and multi-cloud solutions portfolio for enterprise customers. 

The confirmation from IBM follows intense speculation over a proposed deal for HashiCorp, first reported by the Wall Street Journal on Tuesday 23rd April. 

Under the terms of the agreement, IBM said it will acquire HashiCorp for $35 per share in cash, representing a total enterprise value of $6.4 billion. 

At its IPO in December 2021, HashiCorp was valued at over $14 billion and currently has a market cap of $5.8 billion.

HashiCorp chief executive Dave McJannet said IBM represents the "ideal home" for the company as it enters is next phase of growth. 

"Today is an exciting day for our dedicated teams across the world as well as the developer communities we serve," he said. 

"I'm proud of the work we've done as a standalone company, I am excited to be able to help our customers further, and I look forward to the future of HashiCorp as part of IBM."

HashiCorp acquisition makes sense for IBM

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Ross Kelly

Ross Kelly is ITPro's News & Analysis Editor, responsible for leading the brand's news output and in-depth reporting on the latest stories from across the business technology landscape. Ross was previously a Staff Writer, during which time he covered cloud computing, startups, and small business innovation.

The HashiCorp deal marks the latest in a string of major acquisitions by IBM, having completed two deals already so far in 2024, and underlines the growing enterprise appetite for hybrid and multi-cloud solutions in the age of generative AI. 

It’s a topic that’s been bubbling to the surface over the last year amid questions over how enterprises can maximize the use of generative AI applications by leveraging hybrid cloud setups.

Speaking to ITPro in October last year, NetApp chief executive George Kurian suggested generative AI and hybrid cloud are converging technologies that would eventually amalgamate into a singular strategy - and there are several key reasons for this, including flexibility, cost considerations, and safety.

Hybrid cloud enables businesses exploring the use of generative AI tools to fine-tune strategies before taking the plunge to market, Kurian said. Similarly, the flexibility of hybrid cloud enables them to shift applications and workloads on and off the cloud based on their unique individual circumstances.

Experimentation in public cloud comes first, he noted, but the long-term goal for many enterprises would be to host generative AI workloads in a hybrid environment.

“I think the hybrid cloud is a classic AI business use case,” he told ITPro. “Customers will want to try proof of concepts on the public cloud where all the modern tools are available, and once they understand which makes sense, they can scale it in their own data center.”

With HashiCorp, IBM appears to have found a match made in heaven to deliver on this idea long-term. IBM chief executive Arvind Krishna specifically highlighted the “global excitement surrounding generative AI” as a factor in the deal, alongside evolving enterprise infrastructure needs.

"Enterprise clients are wrestling with an unprecedented expansion in infrastructure and applications across public and private clouds, as well as on-prem environments,” he said.

"HashiCorp has a proven track record of enabling clients to manage the complexity of today's infrastructure and application sprawl. Combining IBM's portfolio and expertise with HashiCorp's capabilities and talent will create a comprehensive hybrid cloud platform designed for the AI era," he added. 

The shift to hybrid and multi-cloud setups - which involves a combination of on-prem and public cloud services - has raised infrastructure challenges for enterprises, particularly in terms of complexity.

It's an issue that IBM specifically highlighted in its 2023 annual report, noting that nearly two-thirds of companies “report difficulty managing these complex environments”.

It also predicted these challenges will be exacerbated as firms ramp up the deployment of generative AI across multiple clouds.

In this context, the HashiCorp acquisition can be seen as IBM putting its money where its mouth is. While the company has strong foundations on the AI and hybrid cloud fronts, and bringing HashiCorp’s capabilities into the equation will likely create a closer sense of alignment between these two aspects of the business.

HashiCorp certainly appears to be a "strong strategic fit", as IBM puts it.

What you need to know about HashiCorp

HashiCorp is a cloud infrastructure company that has a suite of tools aimed at helping IT professionals manage and automate multi-cloud environments, such as infrastructure as code (IaC) provisioning, and workload scheduling and orchestration. 


It lists customers including Vodafone, Deutsche Bank, and Starbucks.

HashiCorp started with an open source model, which has evolved over time to include free, enterprise, and managed service versions. All HashiCorp projects are accessible through a source-available license which the company said allows broad copying, modification, and redistribution.

It offers community, enterprise, and cloud offerings with free and paid tiers across its portfolio of products which include HashiCorp Terraform, Vault, Boundary, Consul, Nomad, Packer, Vagrant, and Waypoint.

Steve Ranger

Steve Ranger is an award-winning reporter and editor who writes about technology and business. Previously he was the editorial director at ZDNET and the editor of silicon.com.

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