What will happen to Hashicorp?

IBM's recent acquisition of HashiCorp for $6.4 billion is a strategic move to enhance its capabilities in the hybrid cloud and multi-cloud automation sectors. This acquisition is significant because HashiCorp is well-regarded for its innovative tools that are widely adopted across the industry, used by 85% of the Fortune 500 companies (IBM Newsroom).

To give you a summary from my perspective (and this is strictly my interpretation):

IBM has struggled to compete with major cloud providers like AWS, GCP, Azure, and even Oracle. They have their own cloud, the IBM Cloud, but it hasn't been successful against these giants. Upon analyzing the financials, I noted that IBM's revenue started to decline around 2011, which coincides with the boom in cloud services. Around this time, AWS was excelling, and Azure was developing its own platform, officially launching in 2013.

IBM's primary market was originally legacy systems, which were becoming obsolete as they transitioned from hardware to software-focused solutions like storage and databases. Despite attempts to innovate, including the creation of a Managed Services Provider (MSP) division in 2018, their financial decline continued.

If IBM remains static, it might not survive beyond the next decade or so. The big four—AWS, GCP, Azure, and to some extent Oracle—dominate over 87% of cloud workloads. This doesn't leave much room for IBM to compete, hence their strategic acquisition of HashiCorp.This is consistent with IBM's earlier acquisitions, such as Red Hat in 2018, which further emphasize its commitment to a hybrid cloud approach (TechCrunch).

HashiCorp, primarily a services company, aligns well with IBM's revenue model from managed services. This acquisition could bolster IBM's position by integrating HashiCorp's capabilities across IBM's customer base, enhancing their service offerings and extending their market reach. IBM expects the acquisition to be financially beneficial, projecting an increase in growth and operational efficiencies that should result in significant margin expansion in the near future (IBM Newsroom).

Regarding the community impact, there's concern that IBM might negatively influence HashiCorp’s contributions to open-source projects, as seen with their past acquisitions. However, there’s a possibility that they might take a different approach this time by promoting HashiCorp’s products like Terraform back into the open-source community, though I'm skeptical.

Lastly, it's worth noting that IBM's strategic moves in this space, like their recent interest in acquiring companies like Crossplane, Spacelift, and Env0, indicate their intention to dominate the CI/CD space despite its competitiveness. This is just an assumption, but it shows IBM's direction in enhancing their technology stack.

On the other hand, OpenTofu’s first version is released.