IBM Completes Acquisition of HashiCorp
174 comments
·February 27, 2025schmichael
thisisnotauser
I've had the incredible displeasure of having to maintain multiple massive legacy COTS systems that were once designed by promising startups and ultimately got bought by IBM. IBM turned every last one into the shittiest enterprise software trash you can imagine.
Every IBM product I've ever used is universally reviled by every person I've met who also had to use it, without exaggeration in the slightest. If anything, I'm understating it: I make a significant premium on my salary because I'm one of the few people willing to put up with it.
My only expectation here is that I'll finally start weaning myself off terraform, I guess.
throwaway2037
How is Red Hat going after the acquisition by IBM? From my view, it is going well. The enterprise product (RHEL) is still excellent.
adastra22
Dropping CentOS was a terrible decision. I’m not sure if that happened before or after the acquisition though.
dralley
It's going basically fine. If you're in engineering you would never notice the difference.
pea
Isn’t MQ pretty good?
dramm
I would GTFO, IBM ain't your friend and ain't your savior and are unlikely to invest and the worse may come with increasing IBM management sticking their fingers in the pie. The folks who did well out of this already know, they have the checks to cash if that was your take away congratulations. Otherwise find another opportunity. If nothing else look around and find out what you are worth on the market and then have that hard discussion soon with HashiCorp/IBM.
chippiewill
I worked with a bunch of people who had worked at a startup that got bought by IBM. As the other commenters attested, they too experienced that IBM is not the kind of company that's going to turn on the investment taps.
There are worse companies to get bought by, but if you've only ever worked at startups then you're not likely to enjoy what this becomes.
mistrial9
I spoke with a guy (too long ago) that was a "genius architect" and worked for a company that was small enough, that he got to implement his castles in the air. Knowing him, they might have been quite good, but it was one person that knew the details and made changes at the architect scale. He had a quirky way of thinking.
When IBM acquired that company, after a few weeks, this guy had a meeting with new engineering people. The very first meeting, they changed things for him. Instead of a single winding road of development, they wrote out a large spreadsheet. The rows were the distinguishable parts of his large'ish and clever architecture; the columns were assignments. They essentially dismantled his world into parts, for a team to implement. He was distraught. He didn't think like that. They did not discuss it, it was the marching orders. He quit shortly afterwards, which might have been optimal for IBM.
kaushikt
If you are a good at your job and want to deliver fast then you need to adapt to changing circumstances and continue on. Nothing wrong if you can’t but I have learnt that’s how you play along to deliver your best continuously.
spicyusername
Unfortunately IBM is going to ruin everything that was good about working for Hashicorp and eventually everything that was good about Hashicorp products.
I worked for a company acquired by IBM, and we held hope like you are doing, but it was only a matter of time before the benefit cuts, layoffs, and death of the pre-existing culture.
Your best bet is to quit right after the acquisition and hope they give you a big retention package to stay. These things are pretty common to ease acquisition transitions and the packages can be massive, easily six figures. Then when the package pays out you can leave for good.
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zzzeek
Red Hatter here.
none of that has happened for us at Red Hat. Other than the one round of layoffs which occurred at the time that basically every tech company everywhere was doing much larger layoffs, that was pretty much it and there's no reason to think our layoffs wouldn't have been much greater at that time if we were not under the IBM umbrella.
Besides that, I dont even remember when we were acquired, absolutely nothing has changed for us in engineering; we have the same co-workers, still using all Red Hat email / intranets / IT, etc., there's still a healthy promotions pipeline, all of that. I dont even know anyone from the IBM side. We had heard all the horror stories of other companies IBM acquired but for whatever reason, it's not been that way at all for us at least in the engineering group.
mroche
Former Hatter here (Solution Architect Q2 '21 -> Q4 '22). Other than the discussions that took place around moving the storage/business products and teams under IBM (and the recently announcement transfer of middleware), I wouldn't have expected engineering to do that much interfacing with IBM. At most, division leadership maybe (this is just personal speculation). Finance and Sales on the other hand... quite a bit more.
We had a really fun time where the classic s-word was thrown around... "s y n e r g y". Some of the folks I got to meet across the aisle had a pretty strong pre-2010 mindset. Even around opinions of the acquisition, thinking it was just another case of SOP for the business and we'd be fully integrated Soon™.
They key thing people need to remember about the Red Hat acquisition is that it was purely for expertise and personnel. Red Hat has no (or very little) IP. It's not like IBM was snatching them up to take advantage of patents or whatnot. It's in their best interest to do as little as possible to poke the bear that is RH engineering because if there was ever a large scale exodus, IBM would be holding the worlds largest $34B sack of excrement we've seen. All of the value in the acquisition is the engineering talent and customer relationships Red Hat has, not the products themselves. The power of open source development!
It's heartening to hear that your experience in engineering has been positive (or neutral?) so far. Sales saw some massive churn because that's an area IBM did have a heavier impact in. There were some fairly ridiculous expectations set for year-over-year, completely dismissing previous results and obvious upcoming trends. Lost a lot of good reps over that...
linuxftw
There are no resources and opportunities after being acquired by IBM. I worked for Red Hat when they were acquired. Our former CEO was quickly shown the door. We were making so much profit, almost a $1B in quarterly revenue. I left not long after the acquisition. Not long after I left, they laid off a bunch of staff.
No matter what they tell you, your day to day will not improve. For my area, it was mostly business as usual, but a net decrease in comp because IBM's ESPP is trash.
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ants_everywhere
Hashicorp's stuff always struck me as pretty hacky with awkward design decisions. For Terraform (at least a few years ago) a badly reviewed PR could cause catastrophic data loss because resources are deleted without requiring an explicit tombstone.
Then they did the license change, which didn't reflect well on them.
Now it's being sold to IBM, which is essentially a consulting company trying to pivot to mostly undifferentiated software offerings. So I guess Hashicorp is basically over.
I suspect the various forks will be used for a while.
JohnMakin
> For Terraform (at least a few years ago) a badly reviewed PR could cause catastrophic data loss because resources are deleted without requiring an explicit tombstone.
There have been lifecycle rules in place for as long as I can remember to prevent stuff like this. I'm not sure this is a "problem" unique to terraform.
goodoldneon
IIRC, the lifecycle hook only prevents destruction of the resource if it needs to be replaced (e.g. change an immutable field). If you outright delete the resource declaration in code then it’s destroyed. I may be misremembering though
jmholla
I'm pretty sure you are. I've had it protect me from `terraform destroy`.
ants_everywhere
What happens if you forget the lifecycle annotations or put them in the wrong place or you accidentally delete them? Last time I checked it was data loss, but that was a few years ago.
JohnMakin
The same as in any other language when what you wrote was not what you intended? Sorry, I’m really confused what your complaint here is or how you’d prefer it to work. If you make a sensitive resource managed by any kind of IAC, of course the IAC can destroy it in a manner that would result in irretrievable data loss. The language has for forever put semantics in place to prevent that, and I’m not sure as a power user I’d want it any other way, I’m explicit with what I want it to do and dont want it making crazy assumptions that I didnt write.
like, what happens if you forget to free a pointer in c? sorry for snark but there are an unbelievably numerous amount of things to complain about in tf, never heard this one.
acedTrex
I mean its also data loss if you run DROP DATABASE when you shouldn't. thats not sqls fault
anonfordays
"What happens if I turn a table saw on and start breakdancing on it?"
Of course you're going to hurt yourself. If you didn't put lifecycle blocks on your production resources, you weren't organizationally mature enough to be using Terraform in production. Take an associate Terraform course, this specific topic is covered in it.
SOLAR_FIELDS
An easy way to get someone to admit that terraform is a hacky child’s language is to ask how to simply print out the values of variables and resources you are using in terraform easily. This basic programming language 101 functionality is not present in the language
OJFord
$terraform console
>var.whatever
"its value"
>whatever_resource.foo.whatever_attr
"its value"
SOLAR_FIELDS
Declarative language can absolutely print out what it does know at the time. Which of course won’t be everything. But if I’m taking an input and morphing it at runtime like looping or just moving the information around in a data structure which terraform absolutely allows you to do, the runtime of terraform has all that information. I just can’t get it out.
Plus, there are many times I don’t want to have to use the REPL. Maybe I’m in CI or something. The fact that I cannot iterate over values of locals and variables easy to see what they are in say, some nested list or object, easily and just print out the values as I’m going along for the things terraform does know is just crappy design
nightpool
This works great for toy examples and fails the moment you have 1 (one) module
Xelynega
I agree that terraform is hacky, but is "terraform output {variable name}" not how you would do that?
SOLAR_FIELDS
You have to be able to actually specify the output. And that does not handle all use cases. And it has requirements on how it can be run. And it takes the full lifecycle of the plan. And it won’t work in many circumstances without an apply.
So no. Terraform has the information internally in many cases. There’s just no easy way to print it out.
gue5t
I concur. I looked pretty hard into adapting Serf as part of a custom service mesh and it had some bonkers designs such as a big "everything" interface used just to break a cyclic module dependency (perhaps between the CLI and the library? I don't recall exactly), as well as lots of stuff that only made sense if you wanted "something to run Consul on top of" rather than a carefully-designed tool of its own with limited but cohesive scope. It seemed like a lot of brittle "just-so" code, which to some extent is probably due to how Go discourages abstraction, but really rubbed me the wrong way.
jmclnx
Sorry HashiCorp, been there and got the Tee-shirt (pink) :)
Actually for me, the company I was at that IBM purchased was on the verge of folding, so in that case, IBM saved our jobs and I was there for many years.
hashicorporal
We experienced arbitrary layoffs in 2023, followed by an ominous feeling that more layoffs were imminent. However, the announcement of a deal changed the situation.
Now, we are actively hiring for numerous positions.
Personally, I am not planning to stay much longer. I had hoped that our corp structure would be similar to RedHat, but it seems that they intend to fully integrate us into the IBM mothership.
NetOpWibby
I really wanted to work at HashiCorp in 2017/2018 and did five interviews in one day only to get ghosted[1]. That experience soured me on HC and its tools but I still admired them from afar.
End of an era.
---
[1]: https://blog.webb.page/2018-01-11-why-the-job-search-sucks.t...
scrapcode
What do you expect is the reason this happens? I would suspect your skill assessment after a handful of interviews is sound and most people liked you. Do you think you just run into a person eventually that doesn't vibe?
hashicorporal
That sucks and I apologize this happened to you.
atkailash
[dead]
throwaway2037
Was HashiCorp ever profitable since its IPO? From here, it says no: https://stockanalysis.com/stocks/hcp/financials/
If never profitable (or terrible return on equity), why would you call the layoffs "arbitrary"? It seems pretty reasonable to me.
ghaff
Red Hat has been a very atypical approach. There has been some swapping of teams back and forth but, as far as I can tell (been out of it for a while), Red Hat is still quasi-independent. Still lots of changes (probably most notably because of a lot of growth) but strategic Red Hat areas still seem to be pretty independent.
subpixel
Broadly independent but filled to the gills with folks who spent a decade or more at IBM before landing at Red Hat. While this has been true of rank and file for years, recently it’s true on the c-suite.
dralley
> Red Hat is still quasi-independent. Still lots of changes (probably most notably because of a lot of growth) but strategic Red Hat areas still seem to be pretty independent.
Still broadly correct.
bigfatkitten
One of those places (like HP, Oracle and Broadcom, and also CA back in the day) where once good companies go to die.
dralley
As a current Red Hat employee, I can say that they've treated us far better than the likes of Oracle or Broadcom would have.
glzone1
Redhat has really delivered for IBM and IBM seems not to have messed it up too bad.
Some of this is obvious (linux and mainframes aren't a bad combo). Some of it I'm a bit surprised by (openshift revenue seems strong).
Probably already basically returned purchase price in revenue and much more than purchase price in market cap.
A noticeable thing is
Most of the these type plays the home page has stacked toolbars / marketing / popups / announcements from the parent company and their branding everywhere (IBM XXX powered by Redhat)... I see very little IBM logo or corporate pop-up policy jank on redhat.com.
throwaway2037
Nice. When I opened their homepage, I could not find anything obvious that shows they are owned by IBM. Literally, I had to search the HTML source code to find the sequential characters "IBM"!
tzury
People who stayed at IBM because they could not afford going anywhere else.
People who worked at companies acquired by IBM and could not afford going anywhere else.
A mixture of both will be involved from now on in decision making regarding your platform formation core products.
ripcentos
All these redhatters talking like centos isnt dead. Like wtf, the Kool aid must taste good.
bravetraveler
Condolences, Hashicorp folks. Been there.
commandersaki
Enjoy switching to Lotus Notes.
threeseed
It's called HCL Notes now: https://en.wikipedia.org/wiki/HCL_Notes
And Hashicorp are experts in HCL so I am sure they will love it.
bolognafairy
This is hilarious.
inahga
IBM switched off Notes to Microsoft 365, maybe two years ago or so.
I only correct you because it's an even bigger indictment of Notes that IBM switched off of it.
xocnad
Been gone for a couple of years now. Outlook replaced it. Legacy Domino apps still around in various places though.
tinyhouse
Investors at IPO lost quite a bit of money...
danw1979
Yeap we did. I wrote it off around the time of the licence change, just after they decided to ditch the TF Team plan in favour of the utterly ridiculous “Resources Under Management” billing model.
I knew the company had lost the plot at that point.
jeeyoungk
Who's the target audience for this pricing that can afford this? The RUM pricing is indeed quite ridiculous.
It feels quite ridiculous, especially if you are managing "soft" resources like IAM roles via Terraform / Pulumi. At least with real resources (say, RDS instances), one can argue that Terraform / Pulumi pricing is a small percentage of the cloud bill. But IAM roles are not charged for in cloud, and there are so many of them (especially if you use IaaC to create very elaborate scheme).
brudgers
Who's the target audience for this pricing that can afford this?
The kind of customers it is good to have.
Because filtering out price sensitive customers is a sound business strategy.
As a rule of thumb, solve any problem your customer might have. Except not having money.
progbits
It also creates horrible incentives. Oh I won't run this in isolated project or under a separate service account since that costs more, let's just pile everything together.
Schnitz
Pulumi’s RUM pricing is why I was very hesitant to even evaluate it as an alternative to just using terraform.
thedougd
That must explain why they broke up the S3 resources into a bunch of tiny resources.
sepositus
This is probably inaccurate, but it seemed like they wrote it off as a safe move, with their main competitor, Pulumi, getting away with it.
However, to play devil's advocate, the number of Terraform resources is a (slightly weak) predictor for resource consumption. Every resource necessitates API calls that consume compute resources. So, if you're offering a "cloud" service that executes Terraform, it's probably a decent way to scale costs appropriately.
I hate it, though. It's user-hostile and forces people to adopt anti-patterns to limit costs.
sofixa
> forces people to adopt anti-patterns to limit costs
The previous pricing model, per workspace, did the same. Pricing models are often based on "value received", and therefore often can be worked around with anti-patterns (e.g. you pay for Microsoft 365 per user, so you can have users share the same account to lower costs).
hiatus
> However, to play devil's advocate, the number of Terraform resources is a (slightly weak) predictor for resource consumption. Every resource necessitates API calls that consume compute resources. So, if you're offering a "cloud" service that executes Terraform, it's probably a decent way to scale costs appropriately.
That would make sense if you paid per API call to any of the cloud providers.
eikenberry
It was made apparent right after the IPO. Our team got a new VP in charge who changed the mantra from practitioner-first to enterprise-first. Soon after they then laid-off anyone not working on enterprise features. It was a sad death of a great company culture. Mitchell left around the same time which, IMO, speaks volumes.
ethbr1
The older I get, the more I'm convinced that practitioner-first is the only reasonable way to drive a product's features, while enterprise-first is the only reasonable way to drive a company's revenue.
Which is to say strong sustainable products need both.
... but ffs don't let the entire company use enterprise as a reason to ignore practitioner feature requests.
JojoFatsani
Pricing, and, generally speaking, customer engagement were not their strength
yellow_lead
Had to check the numbers. IPO at $80 and sold to IBM for $35.
Not great for investors, but insiders benefitted a lot!
redeux
Depends how you define insider. Employees were subject to a 6 month lockup and during that time the price dropped dramatically, but they still had to pay taxes on the $80 IPO price. Execs and institutional investors that were able to sell at IPO made out quite well though.
AcerbicZero
Too bad you can't sell the option to buy your shares the day you get them at whatever price you want :/
guelo
Execs are employees, were they really exempt from the lockout? Seems unethical.
paulddraper
> they still had to pay taxes on the $80 IPO price
They will get capital losses.
That's not perfect.
tvaughan
IPOs became exits in 2008. They’re no longer about raising capital
asadm
Yup. My worst investment. Never invest at IPO I guess.
rufus_foreman
If that's your worst investment, you're doing great. I bought stock in HashiCorp. I also bought stock in EBET, for a return of -100.00%.
neom
Worst investment I ever made. I like Mitchell and Armon so I emotionally just bought the IPO and closed my eyes presuming a TWLO or NET. Oh well!! :)
kccqzy
Yup that's me. Happy user of terraform at that time so bought their stock on the day of IPO.
Gee101
Where you paying Terraform for anything at the time?
My doubt in the value of the company was that I've been using Terraform for years in Enterprise settings and never needed to pay the company for anything.
pizzafeelsright
Totally worthless.
Running a few products. Quoted $1MM or so over 3 years for support. I was able to say no and saved six figures each month.
intelVISA
It's been a zombie for a while...
xyst
*retail investors
Retail will always be holding the bag. This is known.
ghaff
Eh. Lots of retail investors do well with the right stock. Lot's of Apple investors have done well over the years. Microsoft even with the right timing.
They didn't with HashiCorp certainly. Bought some but not too much and were part of a housecleaning a few years back (which I'm glad I did).
hiatus
How far away from IPO are Apple and Microsoft now? I think parent is lamenting the state of IPOs as cashing out, if anything.
daveguy
I'm surprised the deal was worth more than the market cap when they did the license rug pull.
toomuchtodo
Broadcom VMware play. If you’re invested as an enterprise in the ecosystem, is going to be a while before you can extricate yourself. In the meantime, you must pay up.
burnte
I'm pretty good at engineering fast moves. I took a company off of Salesforce in 45 days. VMware servers are even easier to changeout. Never done Terraform though.
nailer
That's true, but it's easier to switch from Terraform to Pulumi than it is to move from VMware to some other virtualization platform.
transitivebs
"HashiCorp's capabilities drive significant synergies across multiple strategic growth areas for IBM, including Red Hat, watsonx, data security, IT automation and Consulting"
this sounds like corporate AI slop
iamleppert
No wonder Vault is now trying to get me to pay $50 a month to store more than 25 secrets. Enshittifucation has already begun.
vcryan
I love it when IBM tries to stay relevant!
I joined HashiCorp in 2016 to work on Nomad and have been on the product ever since. Definitely a lot of feelings today. When I joined HashiCorp was maybe 50 people. Armon Dadgar personally onboarded us one at a time, and showed me how to use the coffee maker (remember to wash your own dishes!). There have been a lot of ups (IPO) and downs (BUSL), but the Nomad team and users have been the best I've ever gotten to work with.
I've only ever worked at startups before, but HashiCorp itself left that category when it IPO'd. Each phase is definitely different, but then again I don't want go back to roadmapping on a ridiculously small whiteboard in a terrible sub-leased office and building release binaries on my laptop. That was fun once, but I'm ready for a new phase in my own life. I've heard the horror stories of being acquired by IBM, but I've also heard from people who have reveled in the resources and opportunities. I'm hoping for the best for Nomad, our users, and our team. I'd like to think there's room in the world for multiple schedulers, and if not, it won't be for lack of trying.