In 2023, HashiCorp decided to relicense Terraform under the Business Source License (BSL) away from its previous open-source license, giving rise to OpenTofu, an open-source fork backed by the Linux Foundation. This license allows for the free use of the code except when companies use Terraform to offer a competing service to HashiCorp’s offerings. Notably, BSL is not an OSI-approved open-source license, meaning Terraform’s core was no longer truly open source. This marked a sharp break from the project’s earlier Mozilla Public License (MPL) status and sent ripples of concern through the community.

Within days of this decision, a consortium of open-source advocates launched the OpenTF Initiative. OpenTF forked the last MPL-licensed Terraform code (v1.5.x) and eventually rebranded the project as OpenTofu under the Linux Foundation’s neutral governance. By September 2023, the Linux Foundation formally welcomed OpenTofu as an open-source successor to Terraform, with a pledge of support from 140+ organizations and 600+ individual contributors as well as a commitment of 18 full-time engineers for at least five years to sustain OpenTofu’s development. 

Although at the onset both Terraform and OpenTofu remained similar, they have inevitably started to diverge. OpenTofu has implemented long-requested improvements and enhancements - for example among other features including CLI flags and local evaluations, state file encryption was delivered early on in OpenTofu – a DevSecOps-friendly feature to encrypt sensitive infrastructure state data at rest. Terraform users had asked for native state encryption for ~5 years without it being built. These enhancements directly addressed pain points voiced by IaC practitioners and have contributed to the OpenTofu fork rapidly diverging.

Maintaining two parallel IaC tools that started from the same code is not without downsides. There is an undeniable risk of ecosystem fragmentation. Users and tool vendors now face a choice of supporting Terraform, OpenTofu, or both, which Forge will continue to support. OpenTofu’s creation has necessitated initiatives like a new OpenTofu module registry since HashiCorp’s Terraform Registry remains under HashiCorp’s control. Likewise, CI/CD platforms and Terraform Cloud alternatives have had to ensure their services work equally well with OpenTofu – a burden they’ve largely embraced. All three major cloud providers (AWS, Azure, Google) have quietly verified compatibility with OpenTofu in their tooling.

For DevOps and platform engineering teams – especially those in highly regulated or large-scale, mission-critical environments – the Terraform vs. OpenTofu split raises important considerations:

• Teams must assess whether HashiCorp’s BSL poses any legal or policy concerns. Organizations that value OSI-approved licenses or fear future license shifts may prefer OpenTofu’s MPL 2.0 for its predictability and permissiveness, and highly regulated industries (government, finance) often favor solutions under neutral governance, to avoid vendor lock-in or sudden licensing surprises. 

• OpenTofu has rapidly rekindled the open-source community’s engagement around IaC. The project’s governance is impartial and multi-vendor, which can be reassuring for long-term resilience.

• Terraform has a rich ecosystem of state backends (Terraform Cloud, etc.), enterprise features like Sentinel (policy as code), and a large module registry. OpenTofu is catching up fast – with its own registry and many Terraform Cloud alternatives fully supporting it.

In weighing these factors, each organization will have a unique context. Some have even chosen a hybrid approach (e.g. continuing to use Terraform for now, but contributing to or experimenting with OpenTofu to hedge their bets). Long-term resilience favors an open governance model: OpenTofu can’t be bought out or closed off by design, which is attractive if you plan to rely on your IaC tool for decades. On the flip side, HashiCorp’s Terraform offers continuity with past releases and a single accountable party for support – something highly valued in environments where external support and SLAs are required.

Ultimately, the existence of OpenTofu guarantees that the IaC community has a safety net and a competitive spur. OpenTofu offers a path forward that is more future-proof in the face of industry consolidation and licensing shifts. If you value vendor assurances and a slower pace of change, Terraform (now under IBM’s wing) remains a solid choice with a proven record.

Forge is native-built to have handling for both Terraform and OpenTofu, and we will continue to maintain support for the latest versions of both.