Terraform is no longer the default choice for Infrastructure as Code. What was once the go-to tool for managing cloud infrastructure, its dominance is now being questioned. In 2025, developers, SREs, DevOps teams and enterprises alike are making it clear that Terraform’s reign at the top may be coming to an end.
The breaking point for many began in 2023, when HashiCorp moved Terraform from the Mozilla Public License to the more restrictive Business Source License. But the fallout wasn’t immediate. Over the next two years, teams began to face the real consequences.
This was expected to be reversed when IBM acquired Hashicorp last year in a deal valued at $6.4 billion. The aim was to expand its cloud-based software products to capitalise on the growing demand for AI-powered solutions, and many expected Terraform to become open again.
However, that didn’t happen. Now, by mid-2025, the message is clear: if you’re still using Terraform, chances are you’re already planning an exit.
What Remains the Reason?
An AWS DevOps engineer, Sandesh N, wrote in a blog that the most common technical reason is state management. According to him, teams are tired of wrestling with corrupted state files, broken locks and unpredictable behaviour when two engineers touch the same infrastructure.
Multiple developers have reported that more than half of their Terraform bugs have originated from state-related issues. Not bad code, not misconfigured providers; just Terraform’s fragile way of tracking what exists and what doesn’t.
Meanwhile, some reported that their pipelines failed just because of a single network hiccup during a state update. Others revealed running into bottlenecks trying to lock state across teams. A few even admitted to editing state files manually to fix issues, which says everything one needs to know.
The licensing shift has only made this worse. With the open-source version set to end in July, teams had to decide whether to pay HashiCorp or switch.
Most chose to switch. However, that decision was not just about money; it was about control. Enterprises couldn’t risk building critical infrastructure on a tool with unclear long-term availability. That’s when OpenTofu entered the picture.
Forked directly from Terraform after the license change, OpenTofu kept everything people liked and removed what they didn’t. Open source stayed open. The HCL syntax didn’t change. Moreover, migration was easy; at least, according to those who experienced it.
A Lot of Them Moved Away
Fidelity Investments made headlines at KubeCon 2025 when it announced a migration of around 2,000 applications from Terraform to OpenTofu. The company’s VP of cloud automation and tooling, David Jackson, shared that 70% of their infrastructure moved over in just two quarters.
The rest followed soon after. Without refactoring anything, they simply flipped the default CLI from Terraform to OpenTofu.
Talkdesk took a similar approach, migrating over 4,000 state files. Masterpoint Consulting’s migration was even more striking—over 90 workspaces and more than 39,000 lines of code moved in just seven hours. The company said it felt like a “normal refactor”, rather than a complete rebuild.
The movement isn’t just happening in private Git repositories; it’s playing out in the open. LinkedIn has turned into a stream of migration logs, rants about broken state files, and predictions that Terraform’s best days are behind it.
Piotr Szwed, who’s been building in this space for years, said that tools like Terraform and OpenTofu will lose ground to Kubernetes-native approaches.
Others have shared more practical concerns. Terraform still doesn’t offer a native REST API or support reconciliation loops. Moreover, after all its years of usage, it still requires teams to handle drift manually, assuming they even detect it in the first place.
Reddit’s r/Terraform is full of similar stories. People are struggling with module sprawl, testing gaps and the inability to isolate environments properly. Even defenders of Terraform admit that the tooling needs further improvement. But most no longer expect it to come from HashiCorp.
Others are going further. Crossplane is gaining fans for its Kubernetes-first model. Pulumi is gaining popularity among developers who want to write infrastructure in Python, TypeScript or Go. Meanwhile, some are ditching Terraform altogether and going cloud-native, using AWS CDK, Azure Bicep, or simply YAML with GitOps.
All of these point to one thing: Terraform’s grip is loosening. Tools need to be maintainable, scalable and trustworthy, not just technically, but also legally.
Enterprises have shown that large-scale migrations are possible. Engineers are sharing guides, scripts and blueprints. The knowledge is out there. The incentive is clear. And the trend is only accelerating.
If 2023 was the warning and 2024 was the planning, 2025 is the year Terraform loses its default status. The ecosystem is splitting. And people are not waiting around to see what happens next.
Your reaction
Discussion
What's your take on this story?
No comments yet — be the first to share your view.