James Governor's Monkchips

New Client Profile: HashiCorp

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HashiCorp was founded by Mitchell Hashimoto and Armon Dadgar in 2012, to create tools for modern data center automation. HashiCorp built on the momentum of Vagrant, an open source tool written by Hashimoto, for automating the management of virtual machines images. Vagrant had quickly established itself as the go to tool for developers that wanted to create and break down virtual machine images reproducibly.

But with containers and microservice architectures taking off, and the cloud becoming ever more strategic, a greater prize awaited: namely an end to end stack for automation of all cloud and on premises environments with a slick developer experience. HashiCorp started work on a new integrated suite of tools. Developers that had enjoyed Vagrant swiftly began to adopt other HashiCorp tools, which are also open source, in their daily workflows and routines.

By the time HashiCorp hired David McJannet as CEO in 2016, the company was ready to become an enterprise player, turning grassroots-led developer adoption into corporate adoption. The dynamic has worked out well. Deal sizes quickly expanded under McJannet, as did the sales force. HashiCorp is a notable success as a commercial open source software company. For all those engineer founder-led companies that think they are the only person that should run the company, HashiCorp is a solid counter-example.


  • In November 2018 HashiCorp raised $100m, valuing the firm at $1.9bn. It has raised $170m+ in total.
  • We believe that annual revenues are likely approaching $150m.
  • The company has around 900 employees


Terraform – infrastructure as code. Template-based, scalable way to deploy infrastructure
Pre-approved templates for applications; policy engine for templates across teams. The market leader for AWS automation tooling. The best known brand in the HashiCorp portfolio.

Consul – distributed key value store and service discovery, now increasingly positioned as a service mesh built on the Envoy sidecar. Consul is HashiCorp’s most downloaded tool. For a deeper look at HashiCorp’s service mesh play to enable modern software delivery patterns, see my post HashiConf EU 2019: The Service Mesh push and Progressive Delivery.

Vault – secrets management, identity-based access, application data encryption, with audit trail. Vault has proven to be the magic decoder ring for open source company enterprise revenues. It drives sales at HashiCorp. Where many infrastructure companies struggle to build defensible repeatable revenues streams, Vault helped HashiCorp grow revenues quickly. .

Nomad – workload scheduling and task deployment across container-based and legacy applications; microservices and batch apps. It can be used as a container orchestration engine although HashiCorp doesn’t position Nomad as a Kubernetes competitor. Nomad has adoption from some shops preferring a simpler story for containers, HashiCorp APIs and tight integration with the likes of Consul and Vault.

Sentinel – policy as code platform integrating all HashiCorp products.

Go to Market

HashiCorp has built a truly modular suite. It can be integrated end-to-end and there are strong synergies between the different tools, but the fact that they can be adopted independently is a significant part of the growth story. The fact that they have multiple land-and-expand entry points/multiple personas to champion them within an org (e.g. Ops can pick up Terraform, security teams can get Vault, Dev teams can use Nomad, Networking can use Consul) is a notable part of their GTM.

Competitive Landscape

Competitors include Buoyant, Chef, Pulumi, Puppet, Red Hat Ansible, and VMware. HashiCorp partners closely, but also competes, with Amazon Web Services, Google Cloud Platform and Microsoft Azure. HashiCorp has strong offerings in a number of adjacent related markets for distributed application development management. We can expect solid growth as it expands its enterprise footprint in new and existing accounts. The biggest challenge facing HashiCorp at this point is likely to be a lack of maturity in enterprise customers when it comes to modern software delivery and management. Sophistication is very low, which creates the need for extensive consulting and training services: not a market that a product company wants to be in. HashiCorp is investing in consulting, and implementation services to help customers modernise. But IT inertia is a problem the entire industry faces, as we attempt to transform organisations towards Agile Development, DevOps, and Product Management as a discipline.

For now HashiCorp has great engineering and go to market partnerships with all the major cloud players.

Competition from AWS is likely to increase substantially over the next few years however. Terraform for example competes with CloudFormation, Amazon’s own templating tool for describing and managing AWS resources such as EC2 instances, RDS databases, and identities. Complaints from developers about poor CloudFormation usability are being addressed by Amazon’s Cloud Development Kit, which allows you to define your CloudFormation templates using Java, JavaScript, TypeScript or C#. Meanwhile AWS AppMesh will also compete with Consul in the service mesh market. HashiCorp’s strong positioning as an open cloud offering, supporting multi and hybrid cloud architectures, will help it see continued strong growth. Even as AWS increases pressure, the scale and growth of the AWS installed base will create new market opportunities for HashiCorp. HashiCorp’s momentum and positioning makes it a potential acquisition target for GCP or Microsoft Azure. While it would make an excellent acquisition for AWS in many respects- notably the focus on developer experience, an area where Amazon lags – it’s not the kind of deal AWS normally pursues, preferring smaller tuck in deals. HashiCorp has a shot at being a breakout independent success in the age of AWS, just as VMware was in the era of Microsoft in its client/server pomp.

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