HashiCorp and the OpenTofu Fork¶
Year: 2023
Lesson: The community will fork, faster than you think
What Happened¶
HashiCorp built some of the most important infrastructure tools of the cloud era: Terraform, Vault, Consul, Nomad. All were open source under MPL 2.0. Terraform, in particular, became the standard for infrastructure-as-code.
In August 2023, HashiCorp announced they were relicensing everything from MPL 2.0 to the Business Source License (BSL).1
BSL is explicitly not open source. It restricts commercial use—specifically, it prohibits offering HashiCorp software as a competitive service. After four years, the code converts to a permissive license, but the current version is always restricted.
The terraform community had 11 days warning.
Company releases open source. It becomes valuable. Company tries to capture that value. Community forks. This is the new equilibrium.
The Fork¶
The response was immediate.
Within two weeks, the OpenTofu project launched—a fork of the last MPL-licensed Terraform.2 By September, OpenTofu had joined the Linux Foundation.3 By January 2024, they released OpenTofu 1.6, their first stable version.
The speed was unprecedented. What might have taken months or years happened in weeks.
Why It Happened So Fast¶
Pre-existing frustration¶
The community had concerns about HashiCorp's stewardship before the relicensing. The Terraform provider ecosystem had friction with HashiCorp's registry policies. Trust was already eroding.
Corporate backing¶
Multiple companies—Gruntwork, Spacelift, env0, Scalr—had built businesses on Terraform. The license change threatened their existence. They had strong incentives to fund and promote an alternative.
The Linux Foundation¶
The Linux Foundation provided instant legitimacy and infrastructure. OpenTofu wasn't just a GitHub repo—it was a foundation project with governance, legal protection, and organizational support.
Terraform's architecture¶
Terraform's plugin architecture meant the provider ecosystem wasn't tied to HashiCorp's code. Providers could work with OpenTofu without modification. The ecosystem was more portable than it appeared.
HashiCorp's Position¶
HashiCorp argued:
- BSL still allows most uses—only competitive commercial services are restricted
- They needed to protect their business from cloud providers
- The relicensing was necessary for long-term investment in the tools
These arguments echoed MongoDB and Elastic. The pattern is familiar.
The Current State¶
Both projects continue:
- Terraform — HashiCorp's product, under BSL
- OpenTofu — Linux Foundation project, under MPL 2.0
OpenTofu has diverged from Terraform, adding features HashiCorp rejected. The projects are no longer fully compatible.
The Lessons¶
Fork speed has increased¶
The time from license change announcement to functioning fork is now measured in weeks, not years. Corporate backing, foundation infrastructure, and community organizing have matured.
The business model problem persists¶
HashiCorp faced the same economics as MongoDB and Elastic. Their response was the same. The open source business model for infrastructure software remains challenged.
Contributor agreements matter¶
HashiCorp could relicense because their contributor agreements permitted it. OpenTofu cannot be relicensed the same way—the Linux Foundation's structure prevents it.
If you contribute to a project, understand what rights you're granting.
Trust is hard to rebuild¶
HashiCorp wasn't a villain. They made a business decision many companies have made. But the community felt betrayed—especially given the 11-day notice. Whether Terraform or OpenTofu "wins" long-term, the relationship between HashiCorp and its community is permanently changed.
For Your Decisions¶
When adopting infrastructure tools:
- Check the governance, not just the current license
- Single-company projects carry relicensing risk
- Have migration plans for critical dependencies (see my software building guide for more on dependency evaluation)
When building open source:
- Your contributor agreement defines what's possible later
- Community trust compounds—and so does its loss
- If you might need to relicense, structure for it early (and be transparent)
HashiCorp isn't unique. They're just the latest example of a pattern that will continue.