terraform
Terraform enables you to safely and predictably create, change, and improve infrastructure. It is a source-available tool that codifies APIs into declarative configuration files that can be shared amongst team members, treated as code, edited, reviewed, and versioned.
The Lens
By Erik Loyd, SaaS CEO and former COO/CFO of an AWS Premier Partner.
Updated Jun 2026
Terraform lets you define all of it in code files instead of clicking through AWS/GCP/Azure consoles. Write what you want, run `terraform apply`, and it creates everything. Change the file, run it again, and it updates only what changed.
What's free: The CLI tool is free to download and use. You can manage any cloud provider, any scale, no limits. The language (HCL), the state management, the plan/apply workflow. All free.
Terraform is THE infrastructure-as-code tool. Used by everyone from startups to Fortune 500s. Every cloud provider has an official Terraform provider. The ecosystem of modules and providers is unmatched.
The catch: HashiCorp changed Terraform's license from open source (MPL) to source-available (BSL 1.1) in 2023. You can still use it freely, but competitors can't build commercial products on it. This spawned OpenTofu, a community fork under the Linux Foundation. The state file management is also a real pain point. You need remote state storage (S3, GCS, or Terraform Cloud) for any team usage, and state file corruption can ruin your day.
Free vs Self-Hosted vs Paid
source availableWhat's Free
The Terraform CLI. Unlimited resources, unlimited providers, unlimited state files. You can manage billions of dollars of infrastructure with the free CLI.
Terraform Cloud (HCP Terraform)
- Free tier: 500 managed resources, remote state, 1 concurrent run. Enough for personal projects and small teams.
- Standard: $0.00014/hr per managed resource (~$1.02/mo per resource). 20 resources = ~$20/mo.
- Plus: $0.00028/hr per resource. Adds policy-as-code, drift detection, continuous validation.
- Enterprise: Custom pricing. Self-hosted option, SSO, audit logging.
What the Paid Tiers Get You
Remote state management (huge for teams), run history, policy enforcement (Sentinel), cost estimation, private registry for modules. The free tier's 500-resource limit is genuinely generous.
The License Situation
BSL 1.1 since August 2023. You can use Terraform commercially -- the restriction is on building competing products. If you're just using it to manage your infrastructure, nothing changed for you. If the license concerns you, OpenTofu is the Apache 2.0 fork.
The Math
Self-managing state in S3: ~$1/mo + the time to set up and maintain it. Terraform Cloud free tier: $0 for up to 500 resources. Paying makes sense when you need team collaboration features, policy enforcement, or you have 500+ resources.
CLI is free forever. Cloud free tier covers 500 resources. Pay ~$1/resource/mo when you need team features or scale past the free tier.
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Trust Signals
License: BSL 1.1
Review license manually.
Commercial use: ✗ Restricted
About
- Owner
- HashiCorp (Organization)
- Backed by
- IBM (acquired 2024)
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