IBM Acquires HashiCorp for $6.4 Billion

By Tamara Parker • Thursday, February 27 10:08 • Permanent Link

IBM announced the completion of its acquisition of HashiCorp, highlighting the potential for significant synergies across strategic growth areas. The acquisition represents an enterprise value of $6.4 billion, with HashiCorp's capabilities driving synergies across multiple strategic growth areas for IBM.

Currently, nearly 75% of enterprises are using hybrid cloud, including public clouds from hyperscalers and on-prem data centers. By 2028, it is projected that generative AI will lead to the creation of 1 billion new cloud-native applications, necessitating infrastructure automation far beyond the capacity of the workforce alone.

IBM's Senior Vice President of Software and Chief Commercial Officer, Rob Thomas, emphasized the commitment to continuing to invest in and grow HashiCorp's capabilities, with the aim to infuse HashiCorp technology in every data center.

HashiCorp's CEO, Dave McJannet, expressed excitement about expanding the company's reach with IBM's global scale and customer relationships, aiming to help automate, secure, and optimize cloud infrastructure for their community of customers, practitioners, and partners.

The product detail and availability include HashiCorp's capabilities enabling enterprises to use automation to deliver lifecycle management for infrastructure and security, providing a system of record for critical workflows needed for hybrid and multi-cloud environments. HashiCorp Terraform is a leader for infrastructure provisioning in these environments.

Additionally, HashiCorp's offerings complement IBM's commitment to industry collaboration, developer, and open source communities for hybrid cloud and AI innovation. Furthermore, HashiCorp's Terraform and Vault offerings, along with the broader product portfolio, are available from IBM's automation software portfolio.

The acquisition is expected to drive significant synergies for IBM, including across multiple strategic growth areas like Red Hat, Watsonx, data security, IT automation, and consulting. For example, Terraform and the Red Hat Ansible Automation Platform provide a powerful combination, with Terraform automating foundational infrastructure creation across multiple cloud providers, and Ansible automating application configurations and middleware deployments on top of that infrastructure.

Moreover, HashiCorp Vault combined with Red Hat OpenShift provides robust secrets management and security capabilities across hybrid cloud environments, while Terraform can enable the building and deployment of IBM Z applications in hybrid cloud environments.

The acquisition builds on IBM's portfolio of AI-driven IT automation capabilities, including software for application management insights, full IT stack observability, optimization of application performance, efficient scaling of operations, and financial management solutions.

Following these announcements, the company's shares moved 0.0%, and are now trading at a price of $34.78. If you want to know more, read the company's complete 8-K report here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.