Last Updated on September 8, 2024 by Arnav Sharma

HashiCorp, a leader in infrastructure automation software, has recently announced a significant shift in its licensing model, transitioning from the Mozilla Public License v2.0 (MPL 2.0) to the Business Source License (BSL) v1.1 for future releases of its products, including the widely-used Terraform. This move has sparked interest and queries within the tech community, prompting a need for clarity. In this blog, we’ll delve into what these changes mean for various stakeholders, from end users to commercial customers.

Understanding the Shift to BSL 1.1

The transition to BSL 1.1 marks a strategic move by HashiCorp to manage the commercial use of its source code more effectively. This change is designed to support the ongoing investment in the community of practitioners who rely on HashiCorp’s tools, without hindering their work. It’s a balancing act between open-source ethos and commercial pragmatism.

What Does This Mean for End Users?

For individual users and organizations utilizing HashiCorp’s open-source products for internal or personal use, the shift to BSL 1.1 brings no immediate change. This includes those who are using Terraform for managing their infrastructure. The essence of open-source remains intact for these users.

Integration Partners and Commercial Customers

HashiCorp’s integration partners, who build integrations with products like Terraform, will see no change in their operations or licensing terms. Similarly, commercial customers of HashiCorp will continue to operate under their existing, separately negotiated licenses. This ensures a seamless transition for businesses already embedded in the HashiCorp ecosystem.

The Implications for Competitive Offerings

A significant aspect of the BSL 1.1 is its impact on competitive offerings. Organizations that offer products or services in direct competition with HashiCorp’s commercial versions will no longer be permitted to use the community edition products under the BSL license without charge. This move is aimed at protecting HashiCorp’s commercial interests while still offering a pathway for competitors through commercial licensing terms.

Terraform Providers and Internal Use

Terraform providers maintained by HashiCorp will continue to be licensed under MPL 2.0, ensuring consistency for developers in the ecosystem. For organizations looking to use HashiCorp products internally, including hosting them as a service, the BSL terms are accommodating, allowing both non-production and production usage, barring competitive offerings.

Consulting and Professional Services

The new licensing model does not impact professionals providing consulting services around HashiCorp products. This is a relief for consultants and systems integrators who assist clients in deploying and managing HashiCorp tools.

HashiCorp’s licensing shift is a significant development in the open-source community, reflecting a growing trend where companies seek to balance open-source principles with commercial viability. For the vast majority of users, especially those using Terraform and other HashiCorp tools for non-competitive purposes, the transition to BSL 1.1 will be smooth, with little to no immediate impact on their day-to-day operations. As the landscape of software licensing continues to evolve, HashiCorp’s approach could serve as a model for other open-source companies grappling with similar challenges. The key takeaway for the community is the continued availability and support for HashiCorp’s tools under the new licensing model, ensuring that the innovation and collaboration inherent in the open-source ethos continue to thrive.

Licensing FAQ

Q: What recent changes has HashiCorp announced regarding the licensing of their products?

HashiCorp announced a licensing change for their products, transitioning from an open source license to the Business Source License (BSL). This new BSL license will apply to future releases of HashiCorp products, including HashiCorp Terraform. The change aims to balance the integrity of open source while addressing business strategy needs.

Q: How is the BSL license different from HashiCorp’s previous open source available license?

The Business Source License (BSL) is a different license from HashiCorp’s original open source license. The BSL is a source-available license that allows access to the source code but imposes certain restrictions on the use of BSL licensed HashiCorp products, especially in cases where an organization might use HashiCorp technology in a competitive manner. This differs from the more permissive nature of typical open source licenses.

Q: What impact does the new licensing have on the future of Terraform and other HashiCorp products?

With the adoption of the BSL, HashiCorp aims to keep Terraform and other HashiCorp products like Vault and their APIs open and accessible while protecting against vendors who take advantage of pure OSS (Open Source Software) for commercial gain. This change is intended to ensure the sustainability of HashiCorp’s open-source project and community products, without turning them into non-open source or closed source.

Q: Can organizations still use HashiCorp’s products under the new BSL license for commercial purposes?

Organizations can still use HashiCorp’s products under the new BSL license for various commercial purposes. However, restrictions apply to use cases beyond the BSL limitations, such as embedding or hosting BSL licensed HashiCorp products in an offering made available to multiple customers that is competitive with HashiCorp products. The use of HashiCorp’s source code in products in a competitive manner with HashiCorp products is not permitted.

Q: How does HashiCorp’s co-founder and CTO view the license change?

HashiCorp co-founder and CTO, Armon Dadgar, emphasizes the importance of maintaining the concept and integrity of open source while adapting to new challenges. By changing the license to the Business Source License, HashiCorp could better manage use cases and protect against competitors while continuing to support the community and open-source projects. This move is part of a larger effort to balance open source ideals with commercial realities.

Q: What are some key features of the Business Source License (BSL) used by HashiCorp?

HashiCorp’s BSL license is a source available license that allows access to the source code but with certain limitations. It’s designed to protect HashiCorp’s business interests while still offering open-source benefits. The license permits use of HashiCorp products in a non-competitive manner, meaning including the source code in almost all other libraries and applications that don’t directly compete with HashiCorp’s commercial products.

Q: How does HashiCorp’s BSL license affect organizations hosting or embedding their products?

Organizations that are considering embedding or hosting BSL licensed HashiCorp products need to be aware of the limitations set by the new license. The BSL restricts hosting HashiCorp products in an offering that competes with HashiCorp’s own commercial services. This means that while there is flexibility in using HashiCorp’s technology, using it to directly compete with HashiCorp’s commercial products is not permitted.

Q: How does the license change impact HashiCorp’s relationship with commercial partners?

The license change to BSL allows HashiCorp to maintain a more controlled and mutually beneficial relationship with commercial customers who partner with them. By restricting the use of their source code in competitive products, HashiCorp ensures that commercial customers who collaborate with them do not use their technology to create direct competition.

Q: What is HashiCorp’s stance on the broader concept of open source?

HashiCorp remains committed to the concept of open source, even with the license change. Co-founder and CTO Armon Dadgar highlights the importance of maintaining the integrity of open source while adapting to the evolving landscape. HashiCorp considers the BSL as a means to keep their projects like Terraform open source, ensuring their future and sustainability.

Q: How will Terraform users be affected by the 2023 license change?

Terraform users, particularly those in the community around Terraform, will still have access to the source code and can use Terraform for thousands of use cases, as long as they abide by the new BSL limitations. This ensures that individual and joint users and customers can continue to benefit from Terraform, while HashiCorp protects its business interests.

Q: What are some examples of open source products developed by HashiCorp?

A: HashiCorp has developed several open source products, including Terraform, which is one of their most well-known projects. Terraform allows users to define and provide data center infrastructure using a declarative configuration language.

Q: How does HashiCorp’s Business Source License (BSL) impact the use of their open source projects?

A: The HashiCorp BSL license is a unique approach to open source licensing. It allows HashiCorp to keep Terraform open and free for most users while restricting its use by certain large-scale commercial operations. This license change was implemented to protect HashiCorp technology from being used in a non-competitive way by large enterprises.

Q: Can you name a project that uses HashiCorp technology?

A: Thousands of Terraform modules and projects across various industries utilize HashiCorp technology. These projects often leverage Terraform for infrastructure as code purposes, utilizing HashiCorp’s APIs and other tools to automate and manage their infrastructure.

Q: What was the original license for Terraform, and why did HashiCorp change it?

A: Terraform originally used the MPL v2 license, which is a well-known open source license. However, HashiCorp later transitioned Terraform from the MPL to their own HashiCorp BSL to have more control over the use of their source code, especially in large-scale commercial environments.

Q: How does HashiCorp define an organization’s eligibility for using their open source products under the BSL?

A: HashiCorp considers an organization’s size, nature of business, and specific use cases when determining eligibility under the BSL. Generally, individual users and smaller companies have full access, but larger companies, especially those seen as competitors, may face restrictions.

Q: What is the significance of Terraform version 1.5.5 in the context of HashiCorp’s open source journey?

A: Terraform 1.5.5 represents a specific iteration in the long line of versions of Terraform developed by HashiCorp. Each version typically brings new features, fixes, and sometimes changes in licensing terms, reflecting HashiCorp’s ongoing commitment to evolving and improving their open source projects.

Q: What are the expectations for customers who partner with HashiCorp in terms of using and contributing to open source projects?

A: Customers who partner with HashiCorp are often expected to adhere to the terms of the BSL, and they are encouraged to contribute to the open source community. This might include submitting forms for feedback, participating in forums, or even publishing source code that enhances the existing HashiCorp projects.

Q: How does HashiCorp ensure that their open source products, like Terraform, remain accessible and beneficial to the wider community?

A: HashiCorp strives to keep Terraform open and accessible to users in the community by offering it under the BSL, which allows free use for most users while protecting against competitive threats. They also encourage community contributions and provide extensive documentation and support to facilitate widespread use and improvement of their open source projects.

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