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IBM acquires HashiCorp in $6.4 billion deal

The deal, expected to conclude before the year's end, will help IBM enhance its ability to address cloud opportunity

IBM acquires HashiCorp in $6.4 billion deal
[Source photo: Chetan Jha/Press Insider]

American tech giant IBM will acquire cloud-computing infrastructure firm HashiCorp in a mega deal valued at $6.4 billion, the companies announced. 

The deal, expected to conclude before the year’s end, will help IBM enhance its ability to address cloud opportunity, which, according to International Data Corporation (IDC), had a TAM of $1.1 trillion in 2023, with an estimated compound annual growth rate (CAGR) above 19% till 2027. 

The total cloud opportunity is the sum of the cloud-directed spending across hardware, IT services, and software for private and public cloud implementation. 

The boards of directors of IBM and HashiCorp have both approved the definitive agreement under which the former will acquire the latter at $35 per share. 

The acquisition is subject to regulatory approvals. 

With this acquisition, both companies can deliver more comprehensive hybrid and multi-cloud offerings to their enterprise clients. 

California-based software company HashiCorp’s offerings, combined with IBM and Red Hat, will create a platform to enable enterprise clients to automate the deployment and orchestration of their workloads, including hyperscale cloud service providers, IBM said in a press release.  

After its merger, HashiCorp will be able to run its growth initiatives by leveraging IBM’s market strategy, scale, and reach, operating in more than 175 countries.

Commenting on the deal, IBM chairman and chief executive officer Arvind Krishna said, “The global excitement surrounding generative AI has exacerbated these challenges, and CIOs and developers are up against dramatic complexity in their tech strategies.” 

Combining IBM’s portfolio and expertise with HashiCorp’s capabilities and talent will create a comprehensive hybrid cloud platform designed for the artificial intelligence era, Krishna added.

“Our strategy at its core is about enabling companies to innovate in the cloud while providing a consistent approach to managing cloud at scale. The need for effective management and automation is critical with the rise of multi-cloud and hybrid cloud, which is being accelerated by today’s AI revolution,” said Armon Dadgar, HashiCorp co-founder and chief technology officer. 

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