IBM has agreed to acquire HashiCorp, a provider of multi-cloud infrastructure automation software, for $6.4 billion in cash.

The deal underscores IBM's efforts to strengthen its hybrid cloud computing capabilities as enterprises grapple with managing increasingly complex IT environments spanning multiple clouds and on-premises data centres.

HashiCorp's suite of open source tools, most notably Terraform, helps companies provision and manage computing infrastructure across different cloud platforms using code. Its products are popular among developers and widely adopted, with over 500 million downloads last year and customers including major banks, tech firms and retailers.

IBM chief exec Arvind Krishna said that "HashiCorp has a proven track record of enabling clients to manage the complexity of today's infrastructure and application sprawl," adding that the addition of HashiCorp's technologies will create a "comprehensive hybrid cloud platform designed for the AI era," referring to the rapid adoption of resource-intensive AI workloads.

The deal comes as IBM doubles down on the hybrid cloud computing market after acquiring open source giant Red Hat for $34 billion in 2019. By combining HashiCorp's infrastructure automation tools with Red Hat's OpenShift platform, IBM aims to offer a more streamlined way for enterprises to build, deploy and manage workloads across their hybrid environments.

The all-cash transaction values HashiCorp at £28 per share, a 32 per cent premium over the company's closing stock price on 8 May. It is expected to complete by the end of 2024, subject to shareholder and regulatory approvals.

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