IBM drops $6.4B for HashiCorp and its multicloud automation technology

IBM today said it will buy multicloud infrastructure automation company HashiCorp for $6.4 billion.

Once the deal closes, which is expected by the end of 2024, IBM plans to further integrate Hashicorp’s automation technology into its Red Hat, watsonx, data security, IT automation and consulting businesses. IBM uses Hashicorp technology in many of its cloud offerings already.

HashiCorp’s products include the widely deployed Terraform package, which enables customers to automatically provision infrastructure, network, and virtual components across multiple cloud providers and on-premises environments. The company also offers Vault for identity-based authentication and to authorize access to sensitive data; Nomad for workload orchestration; Boundary for secure remote access; and Consul for service-based networking.

In addition, HashiCorp has technology agreements with most major cloud providers, including Amazon Web Services, Google Cloud, and Microsoft Azure.

HashiCorp is “a company we have partnered with for a long time and believe is a tremendous strategic fit with IBM,” said Arvind Krishna, IBM chairman and chief executive officer, during a conference call. “Enterprise clients are wrestling with an unprecedented expansion in infrastructure applications across public and private clouds, as well as on-prem environments, making this the ideal time to pursue this acquisition,” Krishna said. “As generative AI deployment accelerates alongside traditional workloads, developers are working with increasingly heterogeneous, dynamic, and complex infrastructure strategies. HashiCorp has a proven track record of helping clients manage the complexity of today’s infrastructure by automating, orchestrating, and securing hybrid and multi-cloud environments. 

HashiCorp will be a strategic addition to the IBM portfolio, extending Red Hat’s hybrid cloud capabilities to provide end-to-end automated infrastructure and security lifecycle management, Krishna said. “TerraForm is the industry standard for infrastructure automation for these environments with security top of mind for every enterprise,” Krishna said.

For example, combining the configuration management capabilities of Red Hat’s Ansible Automation Platform and Terraform’s automation will simplify provisioning and configuration of applications across hybrid cloud environments, IBM stated.

The HashiCorp deal will be IBM’s third acquisition of the year and 13th since 2023. The company’s 2018 acquisition of software company Red Hat for $34 billion, including debt, remains its biggest buyout to date, according to a Reuters report.

Dave McJannet, HashiCorp’s CEO, will report to Rob Thomas, IBM’s senior vice president in charge of software, if the deal goes through, according to IBM.