MSPs Call IBM’s HashiCorp Acquisition a Good Fit

MSPs agree with IBM CEO Arvind Krishna’s claim that the $6.4 billion HashiCorp acquisition will bring synergies to IBM’s software portfolio, including Red Hat.

“We believe there will be added demand because a combined portfolio is more interesting,” Arvind said during IBM’s earnings call Wednesday when it confirmed the HashiCorp acquisition. “We think even more clients will talk to us. That is how 'Hashi' will help Red Hat. Hashi to us is an accelerant for IBM’s strategy and for our software strategy.”

HashiCorp is known mostly for its TerraForm cloud infrastructure automation, but also sells Vault encryption management and Consul service networking to enable hybrid and multiclouds. IBM expects the deal to close by the end of 2024.

“There are a lot of synergies between the IBM Red Hat portfolio and HashiCorp,” said Paul Nashawaty, principal analyst for DevOps at Futurum Group. “Combining the three technology stacks provides a convergence of different types of technologies that can help with automation, the CI/CD pipeline, software development and cloud computing. It puts the lion's share of the automation, which is Ansible and TerraForm, under the IBM umbrella. If somebody's looking at automation and AI integration with watsonx, that really gives IBM a large competitive advantage.”

The Futurum Group's Paul Nashawaty

An MSP who works closely with HashiCorp seconded that assessment. Jeffrey Eiben, founder and CEO of Pittsburgh-based River Point Technology, said he is optimistic about the deal even if River Point currently does little business with IBM.

“There were some potential suitors of Hashi that I wouldn’t have been as pleased with, but I’m really encouraged with the investments IBM has made the last couple of years with their current CEO,” Eiben said. “I know Hashi pretty well. I know where their market challenges are. And I think IBM can certainly help that. The product is mature to the point where the individual tools aren’t the challenge; it’s the integration across the whole ecosystem. That’s what they need to get the scale and adoption they’re looking for. A place like IBM certainly has a broad portfolio, and it obviously has the customer base and the investment required to drive that.”

River Point's Jeffrey Eiben

River Point was HashiCorp’s Competency Partner of the Year for 2023 and is the only HashiCorp partner certified in all three of the company's competencies — infrastructure, security, and networking. River Point also partners with Red Hat’s Ansible, and Eiben said TerraForm and Ansible are a good fit even if some consider them competitive.

“There’s a lot of confusion in the market around where Ansible starts and stops and where TerraForm starts and stops,” Eiben said. “Our message has been ‘Better Together’ rather than just one or the other, because they really do different things. There’s some overlap, but if IBM can present it as a more unified solution, that’s better for the customer. For true end-to-end automation for the developer, for security, for networking and everything else, you really need all these tools operating together.”

IBM's HashiCorp Acquisition ‘Makes Sense’

Ron Lovern, executive VP of Dallas-based MSP Triton Networks, is not a HashiCorp partner but agrees that the industry is moving toward the type of convergence the acquisition brings.

“I believe we will see more of this type of alignment between infrastructure and application resources. It just makes sense in today’s business market,” Lovern said. “The continued sprawl of network infrastructure, security and cloud convergence is a growing concern in the industry.”

Triton partners with SectorFlow AI for cloud integration and automation for its Triton One Solutions platform.

Futurum’s Nashawaty said HashiCorp will provide an advantage for IBM partners.

“Since this is an emerging market, adding HashiCorp to the IBM partner ecosystem gives them a lot of tools in the toolbox to be successful in deployments,” he said. “This isn’t just automation. The HashiCorp portfolio applies across service meshes, it applies across security, it’s across the entire portfolio.”