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Terraform Cloud adds enterprise support, usage-based pricing

Terraform Cloud's new Business tier is a sign of what's to come for both Terraform Enterprise and IT ops teams overwhelmed with tools to manage, industry analysts say.

Terraform Cloud now matches many of the advanced features of on-premises Terraform Enterprise, but with pay-as-you-go pricing and management help for users that will make it a strategically crucial part of HashiCorp's product line.

Terraform, HashiCorp's infrastructure-as-code product, is widely used to provision cloud server infrastructure underneath Kubernetes container orchestration clusters. Terraform Cloud was initially introduced two years ago as a free service that provided developers managed updates and cloud storage space for state information. That offering did not support collaborative workflows or kicking off more than one Terraform run -- the process of applying Terraform plans to infrastructure resources -- at a time.

Last year, HashiCorp added a midrange tier, Terraform Cloud Team & Governance, which added support for team collaboration, governance features such as role-based access control and two concurrent Terraform runs.

As Terraform Cloud expanded, larger customers showed interest in it, including existing users of on-premises Terraform Enterprise, HashiCorp officials said. This week, the vendor rolled out Business tier for Terraform Cloud to target that audience, with expanded third-party tool integrations, advanced tech support plans and a new usage-based approach to pricing.

"The initial goal was to drive adoption of Terraform with the Terraform Cloud free tier -- we didn't anticipate how much of an uptake Terraform Cloud would get," said Amith Nair, vice president of product marketing for Terraform at HashiCorp. More than 55,000 customers have signed up for the existing Terraform Cloud services, and 10 large enterprise accounts signed up for early access to Business tier before it became generally available this week.

Terraform Cloud pricing tiers
Terraform Cloud Business tier includes enterprise features not available in free and midrange versions of the service.

Terraform Cloud the heir apparent to Terraform Enterprise

As enterprises move to the cloud, Terraform Cloud Business tier seems poised to become the focal point of HashiCorp's infrastructure-as-code product line, according to industry analysts.

"Over time this will become the [main] product and Terraform Enterprise will become legacy," said Tom Petrocelli, analyst at Amalgam Insights. "That appears to be the direction here, especially because this is a product specifically designed for hybrid cloud."

Business tier for Terraform Cloud introduces two features specifically to manage on-premises assets alongside cloud-based infrastructure. One is support for fixed IP addresses, which will better support on-premises server nodes that aren't ephemeral, as cloud instances are. The other is support for self-hosted agents through proxies that communicate with Terraform agents in data centers or cloud deployments that users don't want to open to external traffic.

Over time this will become the [main] product and Terraform Enterprise will become legacy. That appears to be the direction here, especially because this is a product specifically designed for hybrid cloud.
Tom PetrocelliAnalyst, Amalgam Insights

Another key functional difference compared with the existing Terraform Cloud offerings is that the Business tier supports more than two concurrent Terraform runs, and is priced, in part, according to the number of concurrent Terraform runs an organization requires. Business tier pricing is also calculated according to number of users, and the number of Terraform apply commands made to kick off Terraform runs, all of which aligns Business tier for Terraform Cloud with the consumption-based pricing model typical of cloud services.

Terraform Enterprise, by contrast, is priced according to the number of user workspaces, rather than per user or by the number of actions the tool takes. This was originally done to reduce the potential that enterprise customers would license just one user -- the CI/CD pipeline -- and skirt full licensing fees, said Gregg Siegfried, analyst at Gartner Inc.

"By making enterprise features accessible in a simpler model, I fully expect that [Business tier] is going to help them, let's say, remediate the pricing on Terraform Enterprise," Siegfried said.

HashiCorp didn't specify a sticker price for Business tier for Terraform Cloud but said the average cost will be similar to Terraform Enterprise. HashiCorp is "working toward exploring a consistent pricing model across both Terraform Cloud and Terraform Enterprise," according to a statement through a spokesperson.

Terraform Cloud cuts tool management time

Terraform Cloud Business tier introduces new integrations with third-party tools such as Okta single sign-on and Splunk for audit logging, with further tie-ins to come. And it alleviates the burden of updating and managing Terraform software itself. Both aspects of Business tier for Terraform Cloud could benefit enterprises where too much time is spent integrating and managing tools, analysts said.

"When you have to spend tons of time managing the tools to manage the infrastructure, things are out of hand," Petrocelli said. "Now somebody comes along and offers to take that tool burden away, and it becomes a way to manage infrastructure no matter where that infrastructure is."

The potential to eliminate IT ops grunt work, along with Terraform Cloud's position outside corporate data centers, could also give the service renewed relevance in an ongoing industry conversation about enterprise multi-cloud management, Siegfried said. Terraform Cloud is much more appealing as a multi-cloud orchestrator when it, too, is a cloud-based service with integrated single sign-on and access control features.

"It becomes much easier to understand how to integrate Terraform into an application workflow than trying to do it in your own orchestration platform and then extend it for every cloud you're in," Siegfried said.

However, HashiCorp will have to straighten out its messaging around Terraform Cloud and the broader HashiCorp Cloud Platform (HCP) it previewed at HashiConf in June, Siegfried added. Terraform Cloud will remain multi-tenant, while HCP will be single-tenant, according to Nair.

HCP will also likely be more focused around the Consul service discovery and Vault secrets management products because their usage patterns are distinct from Terraform's, Siegfried predicted.

"There is the potential for messaging confusion that they need to [address], given the announcement of HCP," Siegfried said. "Terraform [also] probably isn't something that's ever going to be as HCP-native as Consul and Vault, because you use Consul and Vault continuously, but use Terraform more at provision time."

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