IBM acquires HashiCorp in a $6.4bn deal to enhance hybrid cloud capabilities

IBM

IBM has acquired HashiCorp a multi-cloud infrastructure automation firm, at a deal valued at approximately $6.4bn, with IBM offering $35 per share.

The acquisition aims to create a comprehensive end-to-end hybrid cloud platform that addresses the growing complexity of managing multi-cloud and hybrid cloud environments. This move is a continuation of IBM’s strategic focus on hybrid cloud and AI, aiming to enhance its infrastructure and application lifecycle management capabilities. The value of the deal stands at $6.4bn, reflecting the significant role HashiCorp plays in the tech industry with its advanced automation technologies.

IBM has been a pioneer in the tech industry, with deep investments in AI and hybrid cloud technologies that cater to enterprise clients across various sectors. Its recent strategies revolve around enhancing its capabilities in these areas to meet the demands of a digital economy. HashiCorp, on the other hand, specializes in multi-cloud infrastructure automation with products that enable extensive infrastructure lifecycle management and security lifecycle management. This helps organizations automate their hybrid and multi-cloud environments efficiently.

This acquisition is set to accelerate IBM’s growth in key strategic areas like cloud computing, AI, and IT automation. HashiCorp’s technologies, such as the Terraform infrastructure provisioning tool, are poised to work alongside IBM’s existing offerings like the Red Hat Ansible Automation Platform, enhancing IBM’s ability to provide integrated and streamlined solutions across its hybrid cloud environments. Moreover, HashiCorp’s influence extends to a vast client base, including over 85% of the Fortune 500 companies, indicating its widespread adoption and trust in the market.

IBM and HashiCorp anticipate significant synergies from the merger, particularly in scaling HashiCorp’s offerings and leveraging IBM’s extensive global market strategy. This collaboration is expected to boost both companies’ positions in the cloud technology sector, targeting a total addressable market in cloud opportunities projected to grow exponentially in the coming years.

“Enterprise clients are wrestling with an unprecedented expansion in infrastructure and applications across public and private clouds, as well as on-prem environments. The global excitement surrounding generative AI has exacerbated these challenges and CIOs and developers are up against dramatic complexity in their tech strategies,” IBM chairman and chief executive officer Arvind Krishna said.

“HashiCorp has a proven track record of enabling clients to manage the complexity of today’s infrastructure and application sprawl. Combining IBM’s portfolio and expertise with HashiCorp’s capabilities and talent will create a comprehensive hybrid cloud platform designed for the AI era.”

“Our strategy at its core is about enabling companies to innovate in the cloud, while providing a consistent approach to managing cloud at scale. The need for effective management and automation is critical with the rise of multi-cloud and hybrid cloud, which is being accelerated by today’s AI revolution,” HashiCorp co-founder and chief technology officer Armon Dadgar said. “I’m incredibly excited by today’s news and to be joining IBM to accelerate HashiCorp’s mission and expand access to our products to an even broader set of developers and enterprises.”

“Today is an exciting day for our dedicated teams across the world as well as the developer communities we serve,” HashiCorp chief executive officer Dave McJannet added. “IBM’s leadership in hybrid cloud along with its rich history of innovation, make it the ideal home for HashiCorp as we enter the next phase of our growth journey. I’m proud of the work we’ve done as a standalone company, I am excited to be able to help our customers further, and I look forward to the future of HashiCorp as part of IBM.”

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