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IBM Expands Hybrid Cloud Management with $6.4B HashiCorp Acquisition

BusinessIBM Expands Hybrid Cloud Management with $6.4B HashiCorp Acquisition

IBM is expanding its presence in the hybrid cloud management arena with the acquisition of HashiCorp for $6.4 billion. This move reflects IBM’s strategic shift away from competing directly with major cloud infrastructure providers like Amazon, Microsoft, and Google. Instead, IBM has been focusing on assisting IT departments in managing complex hybrid environments, leveraging its financial resources to acquire a range of prominent companies in the field.

This acquisition follows IBM’s previous notable purchases, including the $34 billion acquisition of Red Hat in 2018 and the acquisition of Apptio last year. HashiCorp brings to IBM a suite of cloud lifecycle management and security tools, as well as a rapidly growing business. Despite its modest revenue of $155 million last quarter, which is comparatively small for IBM, HashiCorp represents a healthy and expanding addition to IBM’s hybrid cloud offerings.

IBM CEO Arvind Krishna emphasized the significance of HashiCorp’s capabilities in enhancing IBM’s hybrid cloud strategy, highlighting the company’s track record in managing complex infrastructure and applications. He also noted the potential synergies in leveraging HashiCorp’s expertise alongside IBM’s portfolio and AI capabilities.

HashiCorp attracted attention last year when it adjusted the licensing terms of its open source Terraform tool, a move that sparked controversy within the open source community. With IBM’s acquisition of HashiCorp, there is speculation about whether HashiCorp will continue its current approach to open source licensing.

The alignment between IBM and HashiCorp may extend beyond technology, as both companies have faced scrutiny over their handling of open source licensing. Despite these challenges, IBM’s introduction of the Infrastructure Cloud platform this week underscores its commitment to expanding its hybrid cloud offerings, which HashiCorp’s solutions are poised to complement.

As IBM integrates HashiCorp into its portfolio, there are expectations that HashiCorp will maintain its independence and continue to work with multiple cloud providers. Tim Crawford, from research firm AVOA, emphasized the importance of preserving HashiCorp’s neutral stance, particularly in light of IBM’s recent efforts to collaborate more openly with other cloud providers.

In summary, IBM’s acquisition of HashiCorp underscores its commitment to bolstering its hybrid cloud management capabilities, positioning itself to better serve the evolving needs of IT departments managing complex infrastructures in the AI era.

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