IBM’s $6.4bn acquisition of HashiCorp clears UK regulator as competition concerns dismissed

The United Kingdom’s Competition and Markets Authority has concluded that International Business Machines Corporation (IBM)’s proposed $6.4 billion acquisition of HashiCorp, Inc. does not raise competition concerns in the cloud infrastructure software market. After an extensive Phase 1 inquiry, the regulator determined that the transaction is unlikely to lead to a substantial lessening of competition within the Infrastructure-as-Code segment. This decision marks a key regulatory milestone for IBM as it seeks to scale its hybrid cloud offerings through the integration of HashiCorp’s flagship technologies.

The acquisition, first announced in April 2024, positions IBM to consolidate its role as a central player in multi-cloud orchestration, particularly by combining Red Hat‘s Ansible configuration management platform with HashiCorp’s Terraform provisioning tool. Despite both tools being highly prominent in enterprise DevOps ecosystems, the CMA found that they serve distinct roles and are not close substitutes, alleviating concerns around potential market dominance.

What does the IBM–HashiCorp deal mean for multi-cloud provisioning and configuration tools?

The central focus of the CMA’s competitive analysis was whether the merger would diminish innovation or consumer choice in the Infrastructure-as-Code (IaC) sector. This space, critical to modern IT operations, enables enterprises to automate cloud infrastructure deployment and maintenance through code rather than manual processes. HashiCorp’s Terraform and IBM’s Ansible represent two of the most widely adopted IaC tools globally, each addressing separate phases of the cloud infrastructure lifecycle.

Terraform is primarily used for multi-cloud infrastructure provisioning, the process of defining, deploying, and decommissioning resources across public and private cloud environments. Ansible, by contrast, focuses on multi-cloud configuration automation, managing system states, updates, and workflows after the infrastructure has been provisioned. The CMA found that although both tools are foundational to IaC workflows, their use cases are generally complementary rather than overlapping.

The distinction lies not only in technical function but also in architecture. Terraform uses a resource-centric, declarative approach and stores system state data, whereas Ansible adopts a stateless, role-based model. These differences underpin the CMA’s determination that the tools are unlikely to be used interchangeably, even in hybrid cloud environments where both often operate in tandem.

How has Terraform evolved, and why does it matter in this merger?

Since its launch in 2014, Terraform has become a foundational tool in DevOps and platform engineering circles. Its ability to define infrastructure in code and support hundreds of providers made it a de facto standard for provisioning resources across AWS, Azure, Google Cloud, and private data centers. In 2023, HashiCorp’s decision to shift Terraform’s licensing from Mozilla Public License to the Business Source License sparked controversy, leading to the creation of OpenTofu, a community-driven fork of Terraform’s last open-source release.

This licensing shift restricted commercial competitors from incorporating future versions of Terraform into their paid services. Despite this, the tool’s influence remained high due to existing integrations, enterprise adoption, and its extensibility through modules and providers. By acquiring HashiCorp, IBM gains not only Terraform’s codebase but also its deep integration into enterprise automation pipelines, further enhancing its open hybrid cloud strategy.

What is the CMA’s view on competitive risks in the cloud automation market?

The CMA explored whether the combined market share of IBM and HashiCorp could reduce competition or create incentives for anti-competitive practices such as bundling, interoperability restrictions, or price manipulation. The regulator found no evidence to support these concerns.

Internal documents showed that IBM had previously explored a project to enhance Ansible with Terraform-like capabilities. However, this initiative was discontinued in 2023 for strategic reasons unrelated to the merger. The CMA noted that neither company had active plans to bring their tools into direct competition, and customers typically used both tools together rather than as alternatives.

The CMA also dismissed concerns that IBM could foreclose competitors by bundling Terraform and Ansible or degrading support for third-party integrations. Such strategies were deemed economically irrational due to the risk of customer backlash, reputational damage, and the ease with which open-source forks like OpenTofu could fill any interoperability gaps.

Who else competes in the IaC multi-cloud automation space?

Despite HashiCorp and IBM’s strong positions in provisioning and configuration automation respectively, the CMA emphasized the presence of numerous competitors in the broader DevOps toolchain. Vendors like Pulumi, CloudBolt Software, Chef, Puppet, Spacelift, and env0 continue to offer IaC capabilities or orchestration platforms that compete across specific verticals and enterprise use cases.

Moreover, hyperscale cloud providers—namely Amazon Web Services, Microsoft Azure, and Google Cloud—offer their own infrastructure automation tools, although these are typically tied to single-cloud environments. As such, they are not considered direct substitutes for the kind of multi-cloud automation enabled by Terraform and Ansible. Still, their presence creates additional pressure on both IBM and HashiCorp to innovate and differentiate through platform neutrality, scalability, and developer experience.

How is the stock market responding to IBM’s HashiCorp acquisition?

Investor sentiment has been cautiously optimistic in response to the UK regulatory clearance. As of April 4, 2025, IBM’s share price stood at $243.49, reflecting a 2.6% drop from the previous session, but a 28.7% gain year-over-year. Analysts generally maintain a Buy outlook, citing the strategic importance of integrating HashiCorp’s automation stack into IBM’s broader hybrid cloud strategy. The addition of Terraform, Vault, and Consul enhances IBM’s offering for enterprise DevOps teams and could support higher-margin revenue streams.

For HashiCorp shareholders, the acquisition at $35 per share has effectively capped the stock’s near-term value. HCP is now trading at $34.78, close to the deal price, signaling the market’s expectation of a smooth transition. With the acquisition completed, further upside is limited, and most analyst recommendations have shifted to Hold or Exit, pending IBM’s long-term execution.

Why does this deal matter for the future of Infrastructure-as-Code?

Infrastructure-as-Code has become a critical pillar of modern enterprise IT, enabling consistency, scalability, and automation across increasingly complex cloud environments. The merger of IBM and HashiCorp brings together two of the most mature platforms in this space and signals an acceleration in platform unification. However, the CMA’s ruling reinforces that market dominance in one IaC function does not necessarily translate into monopolistic control of the ecosystem.

By integrating Terraform into its hybrid cloud strategy, IBM gains a provisioning layer that complements its Red Hat-based configuration and orchestration tools. This could streamline enterprise workflows and reduce fragmentation across public, private, and on-premises infrastructure. Yet, open-source forks, hyperscaler offerings, and niche players ensure that innovation in IaC will continue to be shaped by a competitive and diversified marketplace.

The CMA’s decision underscores a nuanced understanding of the IaC landscape. It affirms that while IBM and HashiCorp are leaders in their respective categories, the functional separation between provisioning and configuration, combined with open-source resilience and ecosystem interoperability, protects the market from undue concentration.