Could Terraform Return to Open Source Under IBM’s Ownership?
IBM‘s pending acquisition of HashiCorp amid HashiCorp’s zealous copyright enforcement for Terraform raises questions about a potential shift back to a more liberal open source model for Terraform.
Clues about what might change under IBM’s tutelage once its acquisition of HashiCorp is completed can be traced back decades ago in the early 2000s. In a transparent moment, IBM in 2003 in an answer to a complaint filed by software provider SCO, detailed not only its contributions to open source in the community but also its philosophy of open source. Its stance shifted away from its previous model of largely proprietary offerings and services dating back to before semiconductors were even invented.
In its lawsuit, SCO alleged that IBM and numerous other software suppliers and service providers infringed on SCO’s claims of ownership for Linux code that IBM and other organizations contributed to the Linux open source operating system.
IBM disagreed.
“IBM has been actively involved in the open source movement, making significant investments in Linux business efforts over the past five years,” IBM said in its response to SCO’s complaint. “The company participates in various Linux projects that are crucial to its operations and also contribute to the broader open-source community.”
At that time, IBM had already begun to offer what it described in its response as a “comprehensive lineup of products” that supported Linux, including servers, mainframes, memory solutions and a wide range of software offerings, as well as supporting services. IBM noted how it had been contributing source code to Linux under the GNU General Public License (GPL). Contributions made by IBM have been included in Linux products distributed by other companies, such as SCO, under the GPL, IBM said. “Therefore, IBM is entitled to the protections of the GPL for its contributions,” IBM said.
But then things took a nasty turn, which IBM maintained reflected SCO’s inability to create a successful business model. “Despite an initial public offering, SCO has struggled to build a successful business around Linux,” IBM said. “Its Linux business model has never turned a profit, and the company as a whole did not achieve profitability until after it abandoned its Linux business. Instead, SCO has pursued a scheme to extract profits from Unix technology, despite having no role in its development.”
Flash forward to over two decades later when HashiCorp sent a cease and desist letter to the creators of the forked Terraform version claiming copyright infringement. HashiCorp claims that the OpenTofu code fell under HashiCorp’s BSL license for Terraform. All the while OpenTofu claims in a response that the code used was already available under the previous Mozilla Public License v2.0 (MPL 2.0) prior to the imposition of the BSL license. This bold move follows HashiCorp’s announcement it was changing the licensing terms of its leading Infrastructure as Code platform (IaC) Terraform in August 2023. It replaced its open source MPL with the Business Source License (BSL) v1.1, which restricts the use of the code in production.
HashiCorp and a representative from the OpenTofu project declined to comment. IBM did not respond to an email request to comment.
The big question is how might HashiCorp’s BSL license for Terraform change under IBM’s tutelage following its recent decision to not only restrict its use with a BSL license compared to its more liberal general MPL license for Terraform in the past.
What Now
If I were the leader at IBM responsible for the HashiCorp deal, moving all HashiCorp products to Apache-2.0 would be the first decision I would make, and ensure that decision was highlighted in the initial press release.
— Kelsey Hightower (@kelseyhightower) April 23, 2024
So the question remains: Once HashiCorp falls under the IBM umbrella, will it relinquish its software license, cancel claims against the makers of OpenTofu for alleged copyright infringement, and revert to a less-restrictive GPL license? It’s not just a question of what IBM should or could do, but why it might take a particular course of action.
The answer for many, especially open source advocates, is that IBM might revert the Terraform license, which HashiCorp transferred into a BSL license, back to its original, more liberal open source privileges. It might even make good business sense, while the argument has also been made that HashiCorp sought to monetize its investments in Terraform out of desperation in a failed attempt to recoup its generous investments in the project, which has become the leading IaC tool for Kubernetes. Bryan Cantrill, co-founder and chief technology officer at Oxide Computer Company. “What is interesting about the SCO lawsuit is maybe you can view litigation as a kind of tombstone of a failed business model, and the scope of the lawsuit was the tombstone for stripping proprietary infrastructure software, and maybe the cease and desist from HashiCorp and the BSL for the fork of Terraform perhaps will be the tombstone for the restricted open source era and we can we can return to a true open source era.”
HashiCorp’s cease and desist letter intended to prevent the OpenTofu project has been met with controversy. HashiCorp’s demands represent “really bad behavior,” Cantrill said. “It’s behavior that is not consistent with IBM. And maybe I’m being ridiculously optimistic here, but I think IBM has got a real opportunity to show the world who we know IBM to be,” Cantrill said. “I mean, I think it again, missed the exercise aside, there are always going to be missteps. But I think that IBM broadly understands that what is good for the community ultimately is going to be good for IBM.”
Red Hat History
The fate of HashiCorp’s Terraform license within the larger context nevertheless remains uncertain. IBM’s acquisition of HashiCorp, valued at $6.4 billion within IBM’s over $62 billion in 2023 revenue, is significant but not a make-or-break deal for the company, so the Terraform license would represent a relatively small part of IBM’s fortune.
IBM has historically used its acquisition of Red Hat, to bolster its presence in cloud native infrastructure, particularly in the Linux sphere. But under IBM’s ownership of Red Hat, there has been at least one move away from a purely open source model, following Red Hat’s decision last year to restrict access to RHEL code releases exclusively to paid customers, unlike before when anyone could freely download the code.
In this broader perspective, it seems likely that IBM and HashiCorp will prioritize decisions that make the best business sense. This may involve seeking revenue from the Business Entity License (BEL) for Terraform once the acquisition is finalized.
“There’s no question that HashiCorp knew something like this was going to happen when they made the license change. The quintessential question is how to maintain a combination of an open source business model with the ability to provide a commercial service, and there’s no right answer for it — it’s somewhat existential,” Gary Orenstein, chief customer officer at password-protection provider Bitwarden, told The New Stack. “So, I think HashiCorp certainly knew this was going to happen and therefore probably had from the outset ‘said we’re, you know, we’re going to be as aggressive as we can be legally with this because they made a decision that we’re doing this benefit of the company at this point, and you have to enforce it.’”
Still, the acquisition should “tilt things towards open source in general,” “Specifically, IBM was not very successful in developing its own cloud offering, and one could say confidently, that HashiCorp identified and filled in control points for cloud deployments with Terraform. That’s valuable to be right in the middle of it,” Orenstein said. “I could envision IBM now pitching a story of, ‘we’ve got you covered with cloud deployments, whether you want to use Amazon, Azure, Google, or what have you. And we are going to help you through that with Terraform.’”
