IBM acquires HashiCorp for $6.4 billion, expanding hybrid cloud offerings

IBM announced during its first-quarter earnings call on April 24 that IBM would acquire San Francisco-based HashiCorp for $6.4 billion.

The acquisition is part of an effort to expand IBM’s hybrid cloud, multi-cloud and artificial intelligence portfolio. Ultimately, IBM plans to leverage HashiCorp resources to create an end-to-end cloud platform.

“The combined portfolio of IBM and HashiCorp will help clients manage growing application and infrastructure complexity and create purpose-built AI solutions,” IBM Chairman and CEO Arvind Krishna said in a press release about IBM’s first-quarter earnings. A comprehensive hybrid cloud platform designed for the times.

“IBM’s leadership in hybrid cloud and its rich history of innovation make it an ideal home for HashiCorp as we enter the next phase of our growth journey,” HashiCorp CEO Dave McJannet said in a press release.

What HashiCorp brings to IBM

HashiCorp built the HashiCorp Cloud Platform for critical applications, including lifecycle management and security. HashiCorp cloud platform supports integration with major cloud providers such as Google and AWS.

SEE: An IBM survey found that approximately 42% of enterprise-scale companies have launched generative AI. (Technology Republic)

The acquisition by IBM will allow HashiCorp to reach a broader customer base and work closely with IBM on multi-cloud automation deployments. HashiCorp’s lifecycle management and security automation capabilities provide a system of record that helps manage hybrid and multi-cloud environments. IBM singled out HashiCorp’s Terraform as “the industry standard for infrastructure provisioning” in hybrid and multi-cloud environments.

HashiCorp reported fiscal 2024 revenue of $583.1 million.

HashiCorp products help enterprises manage generative AI workloads

Generative artificial intelligence is a key driver of today’s cloud companies. HashiCorp brings IBM an infrastructure suitable for generative AI products. In particular, IBM sees HashiCorp’s automation tools for “heterogeneous, dynamic and complex infrastructures” as useful for clients who may be overwhelmed by the spread and number of AI applications.

HashiCorp products help IBM manage increasingly complex cloud environments

In a press release about the acquisition, HashiCorp co-founder Armon Dadgar described how enterprises have changed in how they view the cloud over the past decade, from on-premises computing to widely distributed hybrid and multi-cloud. “The transformative impact of public cloud also makes it clear that we will inevitably live in a multi-cloud world,” he said.

If more organizations start deploying generative artificial intelligence in the cloud, hybrid and multi-cloud management will become more complex; IBM hopes HashiCorp can help them become the first choice for organizations trying to deal with this complexity.

What else does IBM’s acquisition of HashiCorp mean for business technology buyers?

Through this acquisition, IBM gains HashiCorp’s expertise in cloud infrastructure and applications, and HashiCorp also gains IBM’s support and large customer base, which may provide consumers with more choices to purchase in the future A combined product of both organizations.

HashiCorp will retain its brand name and identity as IBM’s software division.

When we asked IBM for additional comment, the company directed us to the press release and earnings report.