Infrastructure as Code (IaC) tools play a crucial role in automating cloud infrastructure. Terraform has been one of the most widely adopted tools, but in recent times, OpenTofu has emerged as an alternative. Understanding the relationship between Terraform and OpenTofu helps in making the right choice for infrastructure projects.
Background
Terraform was originally open source under HashiCorp. In 2023, HashiCorp changed Terraform’s license to Business Source License (BSL). The reason behind this shift was simple: many companies were building and selling services around Terraform, making money from it without contributing back to the community. To address this imbalance, HashiCorp introduced the BSL.
The change didn’t affect end users who simply use Terraform to manage infrastructure. It mainly impacted companies trying to sell Terraform-based products.
What is OpenTofu?
OpenTofu is a community-driven fork of Terraform, created in response to the licensing change. It remains fully open source and is governed by the Linux Foundation. The best part is that OpenTofu is compatible with Terraform, meaning existing HCL files can be reused without modification.
Is OpenTofu Better than Terraform? 🤔
Here’s how you can decide:
- Stick with Terraform if…
- Your organization is already heavily invested in HashiCorp products like Terraform, Vault, or Consul.
- You have infrastructure and workflows built deeply around Terraform.
- You’re using Terraform internally to create environments like dev, stage, or prod — the license change doesn’t impact you here.
- Consider OpenTofu if…
- You want to align with open source governance and avoid vendor lock-in.
- You or your team prefer community-driven development without licensing restrictions.
- You want a future-proof alternative in case HashiCorp tightens restrictions later.
Example in Real-World Organizations
Take a simple case: your company already uses Terraform to build internal infrastructure. The license change doesn’t affect you, so it makes sense to continue with Terraform. At the same time, being aware of OpenTofu is beneficial. Since it supports the same HCL codebase, you could switch in the future without much pain.
Terraform vs OpenTofu – Quick Comparison
| Feature | Terraform 🔒 | OpenTofu 🌍 |
|---|---|---|
| License | Business Source License (BSL) 📜 | Open Source (MPL, Linux Foundation) ✅ |
| Maintainer | HashiCorp 🏢 | Community-driven, Linux Foundation 🤝 |
| Ecosystem | Mature, strong enterprise adoption | Growing fast, fueled by open source ⚡ |
| Compatibility | Uses HCL (HashiCorp Configuration Language) 📝 | Fully compatible with existing Terraform HCL 🔄 |
| Adoption | Widely used across enterprises 🌐 | Rapidly growing in OSS-first teams 🚀 |
| Best suited for | Companies already invested in HashiCorp products | Teams preferring open source & community governance 🌍 |
Verdict 🎯
Both tools are powerful — Terraform dominates enterprise adoption today, while OpenTofu is shaping the open-source future.
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