HashiCorp, the software company behind a lot of tools including Terraform, announced that they will switch licenses for some of their products. The announcement has been met with mixed feelings from the open source community, largely due to some people misunderstanding its implications. In reality, nothing has changed for the average user of their products. In this short overview, we’ll answer some of the most important questions.

Read their announcement and FAQ

What did HashiCorp announce?

In August of 2023, HashiCorp announced that all future releases of their core products, as well as several libraries, will transition from an open-source MPL 2.0 license to the BSL 1.1 license.

Which products will be affected?

The license transition applies to future releases of all products and several libraries. This includes popular products like Terraform, Vault, Consul, Packer, Nomad, Boundary, and Waypoint. However, current versions of their product will not be affected. Any HashiCorp APIs, SDKs, Terraform providers, and nearly all other libraries will also keep the MPL 2.0 license and remain unchanged.

Why did HashiCorp change the license for their products?

Moving from a completely open-source license to the BSL license will allow HashiCorp to protect their intellectual property and give them more control over how their products are used. It avoids direct competitors from profiting off of products and services built using HashiCorp products and libraries.

Who will have to pay a licensing cost?

The new licensing cost only applies to commercially competing products. In other words, if you use the new version of one of the affected products or libraries to build something that directly competes with HashiCorp’s offering, you will need to pay a licensing fee.

Will there be a default cost for Terraform users?

No. None of the affected products and libraries will become pay-to-use if they weren’t already. As long as you do not use Terraform or the other products to develop a commercially competitive service, you will not have to pay.

Will I have to pay a licensing cost if I use HashiCorp products to offer a service, like FlowFactor?

No, unless your service directly competes with HashiCorp. We use Terraform in our clients’ infrastructures and we offer managed services on these environments, but this service does not directly compete with HashiCorp.

If you are unsure if your company meets the criteria outlined above, we recommend contacting HashiCorp by emailing them at licensing@hashicorp.com and reading their own detailed FAQ.

Will I still be able to contribute to Terraform and other HashiCorp products?

Yes. You will still be able to contribute to the source code of HashiCorp products, including Terraform, in the publicly available repositories. However, you will not be able to fork these repositories anymore, to avoid users from developing a competing product.

Why were there mixed reactions to the original announcement?

Unfortunately, the mixed reactions to the original announcement were mostly based on misinformation. Some recipients operated on a different assumption of what ‘open source’ means, or thought that the source code of the affected tools and libraries would suddenly be closed off.

What are the community editions of HashiCorp products?

HashiCorp used to refer to their products as open source, enterprise, or cloud versions. From now on, they will refer to the open and freely available versions of their products as ‘community editions’ instead, since the new BSL license does not meet the OSI’s definition of open source.

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