IBM will acquire San Francisco-based HashiCorp for $6.4 billion, IBM announced during its Q1 earning call on April 24. The deal is expected to close by the end of 2024.
The acquisition is part of an effort to broaden IBM’s hybrid cloud, multicloud and AI portfolio. Ultimately, IBM plans to use HashiCorp resources to create an end-to-end cloud platform.
“IBM’s and HashiCorp’s combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive hybrid cloud platform designed for the AI era,” said Arvind Krishna, IBM chairman and chief executive officer, in a press release regarding IBM’s first-quarter earnings.
“IBM’s leadership in hybrid cloud along with its rich history of innovation, make it the ideal home for HashiCorp as we enter the next phase of our growth journey,” said Dave McJannet, HashiCorp chief executive officer, in a press release.
HashiCorp makes the HashiCorp Cloud Platform for critical applications, which includes lifecycle management and security. HashiCorp Cloud Platform supports integration with major cloud providers like Google and AWS.
SEE: An IBM survey found about 42% of enterprise-scale companies have rolled out generative AI. (TechRepublic)
Being acquired by IBM will allow HashiCorp access to a wider pool of customers and work closely with IBM on multicloud automation deployments. HashiCorp’s lifecycle management and security automation capabilities provide a system of record that helps manage hybrid and multicloud environments. In particular, IBM called out HashiCorp’s Terraform, “the industry standard for infrastructure provisioning” in hybrid and multicloud environments.
HashiCorp reported revenue of $583.1 million in fiscal year 2024.
Generative AI is a major driver for cloud companies today. HashiCorp brings infrastructure suited for generative AI products to IBM. In particular, IBM identified HashiCorp’s automation tools for “heterogeneous, dynamic, and complex infrastructure” as useful for customers who may otherwise be overwhelmed by the sprawl and number of possible AI applications.
In the press release about the acquisition, HashiCorp co-founder Armon Dadgar wrote about the changes over the last decade in how businesses look at the cloud, from on-premises computing to widely distributed hybrid and multicloud. “The transformative impact of the public cloud also made it clear that we would inevitably live in a multi-cloud world,” he said.
If more organizations begin to deploy generative AI in the cloud, hybrid and multicloud management will become more complex; IBM hopes HashiCorp will help make them a first choice for organizations trying to handle that complexity.
The acquisition – in which IBM gains HashiCorp’s expertise in cloud infrastructure and applications, and HashiCorp gains IBM’s support and large customer base — will likely bring more options to consumers for combined products from the two organizations in future.
HashiCorp will retain its own brand name and identity as a division of IBM Software.
When we asked IBM for additional comments, the company directed us to the press release and earnings report.
