What Big Blue’s HashiCorp Buy Might Mean For The IBM i Platform

May 6, 2024 Timothy Prickett Morgan

Here is a riddle for you, or even two. Why did IBM buy systems software maker HashiCorp for $6.4 billion? And what on Earth, if anything, will this mean for IBM i customers, or even Power Systems customers in general?

If you want to get a deeper background into HashiCorp, check out the Related Stories link at the bottom of this story for the detailed analysis I have done on the company over at The Next Platform. In the meantime, a short overview of HashiCorp and its tools is in order.

Mitchell Hashimoto and Armon Dadgar, the co-founders of HashiCorp, got to know each other at the University of Washington back in 2008, and in 2010 Hashimoto created a tool called Vagrant, which created a workflow to create consistent and repeatable virtualized runtimes atop VirtualBox, VMware ESXi, KVM, Hyper-V, Docker, and Parallels hypervisors for applications. After Vagrant took off, Hashimoto started the company that bears part of his name in November 2012, with Dadgar joining him at the company in July 2013. Shortly thereafter, the two created a tool called Terraform, which is used to manage virtualized resources on clouds and private infrastructure in a declarative manner, describing a desired final state, instead of making declarative statements as in other infrastructure-as-code tools.

These days, the Hashi Cloud Platform – what we have called the Hashi Stack for a number of years – is a collection of eight tools that work together to provision and manage infrastructure and its security.

Each part of the Hashi Stack is designed to integrate well with the other components – but importantly are also designed to be used in a standalone fashion should customers desire this. And many do. But Hashimoto and Dadgar understand a principle that we have been talking about in relation to OS/400 and IBM i for years: Integration does not mean bundling. There should be a la carte options, and a la carte pricing, too. The Hashi Stack has this, and to a much lesser degree, the IBM i platform does. (Compilers and other features are separate, but the database is not, for instance.)

The short answer as to why IBM is buying HashiCorp, which went public in December 2001 and which was on track to break $1 billion in revenues within two years or so by our estimation, is that it is an alternative platform to the combination of the OpenStack virtualization management and the OpenShift Kubernetes container controller that is at the heart of the Red Hat Stack. HashiCorp has around 5,000 customers, which is the same league as what IBM and Red Hat have built with the OpenShift/OpenStack combo. (Which is one of those little secrets no one talks about: You need a server virtualization/cloud controller underneath OpenShift, and most of the time people pick OpenStack.)

OpenStack came out of NASA and Rackspace Hosting and this second iteration of OpenShift came out of Google, but the funny thing is that the way the Hashi Stack works might be more easily integrated into a platform like IBM i running PowerVM. You get the benefits of containerization without the containers – something akin to the subsystems that are long familiar to those who use IBM mainframe and midrange systems.

We leave that to Big Blue to figure out, and we await some explanations and roadmaps.

What we also know is that Big Blue is hedging its bets by acquiring control of the alternative to OpenStack plus OpenShift, and that just as IBM’s “real” systems revenues have been propped up by Red Hat – and a Red Hat whose growth has been slowing in recent years – will now be propped up by the revenue stream from the Hashi Stack.

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From The Next Platform:

IBM Buys HashiCorp To Control The Alternative To Red Hat Kubernetes

HashiCorp Retools Licenses And Software To Grow Its Business

Hashi Stack To Break $1 Billion, With Profits, In Two Years

Burning Cash Like Rocket Fuel To Get Hashi Stack To The Next Stage

Forget Mesos And OpenStack, Hashi Stack Is The New Next Platform