A Guide to Terraform Cloud Alternatives

The Infrastructure as Code Landscape

For teams managing infrastructure with Terraform, Terraform Cloud (TFC) has long been the default platform for collaboration and automation. However, two significant events have prompted many organizations to re-evaluate their subscriptions:

• The RUM Pricing Model: TFC's pricing is based on Resources Under Management (RUM). As infrastructure grows, this model can lead to unpredictable and rapidly escalating costs that are difficult to forecast.
• The BSL License Change: In August 2023, HashiCorp switched Terraform from a permissive open-source license (MPL 2.0) to the Business Source License (BSL). The BSL restricts using Terraform to build products that compete with HashiCorp's offerings, raising community concerns about vendor lock-in and the future of open-source IaC.

These factors, combined with a maturing market, have made exploring alternatives more compelling than ever. This guide provides a matter-of-fact overview of the leading contenders.

OpenTofu's Growing Popularity

In response to the BSL license change, the Linux Foundation adopted OpenTofu, an open-source fork of the last MPL-licensed version of Terraform. It is a community-driven, drop-in replacement.

This is a critical development because it decouples the HCL syntax you write from HashiCorp's commercial offerings. You can now use a genuinely open-source tool on a superior management platform. All major alternatives, including Spacelift, env0, and Scalr, immediately added support for OpenTofu.

Summary of the Contenders

This section provides a brief overview of the main alternatives. A detailed feature comparison follows in Section 4.

Atlantis

Atlantis is the leading open-source, self-hosted option. It works by listening for comments in pull requests, allowing you to run plan and apply directly from your Git provider. It's free but requires you to manage the infrastructure and lacks the advanced features of managed platforms.

Scalr

Scalr is positioned as the most direct, frictionless alternative to Terraform Cloud, addressing TFC's major pain points without forcing a significant change in workflow. It is designed as a drop-in replacement with a focus on simple, predictable pricing and backend flexibility.

env0

env0's primary focus is on enabling developer self-service while providing robust guardrails and, crucially, cost visibility. It allows platform teams to create templates for developers and can show the estimated cost of infrastructure changes directly in a pull request. For organizations where FinOps and budget control are major drivers, its features are highly attractive.

Pulumi

Pulumi represents a paradigm shift. It dispenses with HCL entirely, allowing you to define infrastructure using languages like Python, TypeScript, Go, or C#. It's less an alternative to TFC and more an alternative to Terraform itself.

Spacelift

Spacelift treats IaC as a CI/CD problem, offering a powerful and highly flexible platform. Its native support for Open Policy Agent (OPA) and its ability to manage multiple IaC tools make it a strong choice for organizations with complex, heterogeneous environments.

Strengths of Each

How Each Uses AI

AI is emerging as a key feature to reduce toil and improve productivity. Platforms are integrating AI primarily to assist with code generation and error resolution.

• Scalr: Similar to Spacelift, Scalr AI assists with troubleshooting. It uses the output from a failed run to provide context and recommend solutions, aiming to empower developers to solve their own issues without escalating to a platform team. The feature is disabled by default and included in the standard subscription.
• env0: AI features are less direct within env0 itself. The focus is on integrating with a broader ecosystem. For example, it integrates with Firefly, which has its own AI assistant for cloud asset management and IaC codification.
• Pulumi: A clear leader in AI integration, Pulumi AI allows you to generate complete IaC programs from natural language prompts (e.g., "create a VPC with three subnets and a load balancer"). It supports all of Pulumi's languages and helps iterate on and debug code, significantly lowering the barrier to entry.
• Spacelift: Their Saturnhead AI feature focuses on diagnostics. When a run fails, it analyzes the logs and explains the failure in plain English, suggesting potential fixes. This reduces the time engineers spend deciphering complex error messages.

Pricing Models, Compared

Pricing models are a major differentiator, moving away from TFC's often-unpredictable RUM model.

Concurrency Limits

Concurrency—the ability to run multiple jobs at once—is critical for team productivity. Bottlenecks here can bring development to a halt.

• Terraform Cloud: This is a major point of friction. Concurrency is strictly limited: 1 on the Free tier, 3 on the Standard tier, and only 10 on the expensive Plus tier. This can severely throttle teams during busy periods or incidents.
• env0: A key selling point is unlimited concurrent runs on all paid plans, completely eliminating this bottleneck.
• Spacelift: Concurrency is the basis of its pricing model. You pay for a certain number of concurrent "workers." If you need more parallelism, you pay for more workers.
• Scalr: Offers a flexible and scalable model. Paid plans include 5 concurrent runs on Scalr's shared runners. However, you can deploy self-hosted agents, and each agent's concurrency is independent of the platform limit. A single self-hosted agent can run up to 5 concurrent jobs. By deploying more agents, you can scale concurrency massively at no extra cost from Scalr.
• Pulumi: Tiers the limit. 1 concurrent deployment on the Free plan, 5 on Team, and 25 on Enterprise.

Migration Effort

Vendors understand that migration risk is a major hurdle and have created tools to ease the process. The focus is always on the safe transfer of the Terraform state.

• Scalr & Spacelift: Both offer automated scripts (Python-based for Spacelift) to bulk-migrate workspaces, variables, and state files from TFC. Scalr also highlights the simple manual CLI-based process (terraform state pull/push) and offers free migration periods to prevent double-billing.
• env0: Supports the standard terraform init -migrate-state command and provides guides on reconfiguring TFC workspaces for local execution to facilitate the move.
• Pulumi: Migration is a two-step process. First, pulumi convert --from terraform translates HCL code into a language like Python or TypeScript. Second, Pulumi can import the state from your old .tfstate file. This is more involved as it requires a language shift.

Conclusion

Your TFC renewal date is an opportunity to choose a platform that better fits your team's workflow and budget. The market is now mature enough to offer real choice.

• For complex, multi-tool environments, Spacelift is a strong contender.
• For teams focused on developer self-service and cloud cost control, env0 is purpose-built.
• For teams that are happy with the Terraform workflow but want lower costs, predictable pricing, and less vendor lock-in, Scalr presents the path of least resistance for the most value. It directly solves the primary issues driving users away from TFC—cost and concurrency—with minimal disruption.

Do not simply renew. Conduct a proof-of-concept. The results will likely speak for themselves.

FAQ Part 1

What is the alternative to Terraform Cloud?

There are numerous alternatives to Terraform Cloud, which fall into two main categories. The first is commercial Infrastructure as Code (IaC) management platforms that offer more features and flexibility. Leading alternatives like Spacelift, env0, and Scalr provide unified workflows for multiple IaC tools (not just Terraform, but also OpenTofu, Pulumi, and CloudFormation), more advanced policy-as-code using Open Policy Agent (OPA), and more predictable pricing models compared to Terraform Cloud's resource-based pricing. Tools like Terrateam offer a lightweight, GitOps-native experience directly within GitHub.

The second category consists of open-source and self-hosted solutions. The most popular is Atlantis, which automates Terraform and OpenTofu through pull request comments, providing a collaborative workflow within your Git provider. A growing trend is to use general-purpose CI/CD platforms like GitHub Actions or GitLab CI. While this unifies pipelines, it requires manually handling complexities like state locking and plan readability. Emerging tools like Digger act as an orchestration layer within these CI/CD platforms to bridge that gap.

What will replace Terraform?

There will not be a single, universal replacement for Terraform. Instead, the market is shifting to a multi-paradigm future where the "best" tool depends on the organization's specific needs. The most direct successor is OpenTofu, an open-source, drop-in replacement that was forked from Terraform after its license change. It's governed by the Linux Foundation and is being adopted by major enterprises like Fidelity, making it the designated successor for teams wanting to continue using HCL.

Beyond a direct fork, Terraform is being replaced by different types of tools. Developer-centric teams are moving to Pulumi or AWS CDK, which allow infrastructure to be defined in general-purpose programming languages like Python or TypeScript. Organizations heavily invested in Kubernetes are adopting Crossplane, which turns Kubernetes into a universal control plane for all infrastructure. Ultimately, the long-term successor to the manual Terraform workflow is the Internal Developer Platform (IDP), which abstracts the underlying IaC tool away from developers entirely.

What is the AWS equivalent of Terraform?

AWS offers two main equivalents to Terraform, each representing a different approach. The direct, declarative equivalent is AWS CloudFormation. It is a managed AWS service that allows you to define AWS infrastructure using YAML or JSON templates. Its primary advantages are its deep integration with the AWS ecosystem, automatic state management (which removes operational overhead), and day-one support for all new AWS services and features.

A more modern, developer-centric equivalent is the AWS Cloud Development Kit (CDK). The CDK allows developers to define cloud infrastructure using familiar programming languages like TypeScript, Python, and Go. This code is then "synthesized" into a standard CloudFormation template for deployment. The CDK is favored for its superior developer experience and powerful abstractions ("Constructs") that can create complex architectures with minimal code, making it an excellent choice for application development teams managing their own infrastructure.

Which is better Terraform or CloudFormation?

Neither tool is universally "better"; the choice represents a strategic trade-off. AWS CloudFormation is the better choice for organizations that are fully committed to the AWS ecosystem. Its key benefits are managed state, which simplifies operations, deep integration with AWS services, guaranteed day-one support for new features, and the ability to leverage official AWS Support for troubleshooting. This makes it a reliable and robust choice for AWS-only environments.

Terraform is better for organizations with a multi-cloud strategy or those who prioritize avoiding vendor lock-in. Its main strength is providing a single, cloud-agnostic workflow and language (HCL) to manage resources across AWS, Azure, GCP, and more. While this requires the user to manage the state file and its locking mechanism, it offers portability and benefits from a vast and diverse open-source community, making it the superior choice for heterogeneous environments.

What is the successor of Terraform?

The most direct, community-driven successor to Terraform is OpenTofu. Created as an open-source fork after HashiCorp changed Terraform's license, OpenTofu is designed as a drop-in replacement, ensuring that existing Terraform code, state, and providers work without modification. It is governed by the Linux Foundation to ensure it remains truly open-source and is rapidly gaining adoption from major companies, making it the official heir for users committed to the HCL language.

However, the broader "successor" is not a single tool but a shift towards a multi-paradigm approach to IaC. For developer-led teams, the successor is often Pulumi or AWS CDK, which use general-purpose programming languages. For Kubernetes-native shops, the successor is Crossplane. The ultimate successor to the manual IaC workflow itself is the concept of the Internal Developer Platform (IDP), where a platform team provides infrastructure as a self-service product, hiding the complexity of the underlying tool.

Is AWS CDK better than Terraform?

Whether AWS CDK is "better" than Terraform depends entirely on the team and the use case. The AWS CDK is generally considered better for application development teams who are building and managing their own infrastructure on AWS. Its primary strength is its developer-centric experience (DevEx), allowing developers to use familiar programming languages (like TypeScript or Python), IDEs, and testing tools. Its high-level abstractions, called Constructs, dramatically improve productivity by reducing boilerplate code.

On the other hand, Terraform is better for central operations or platform teams, especially those managing multi-cloud or hybrid-cloud environments. Its declarative, cloud-agnostic nature provides a consistent workflow for managing resources across many different providers, which is something the AWS-only CDK cannot do. Therefore, the choice is between CDK's superior developer experience within a single cloud and Terraform's unparalleled multi-cloud provider ecosystem.

FAQ Part 2

This table summarizes the key characteristics of various Terraform alternatives, evaluating their suitability based on the detailed research analysis.

Is there anything better than Terraform?

There is no single tool that is objectively "better," as the best choice depends on the specific context and goals of your organization.

• For developer-centric teams, Pulumi is often better. It allows developers to use familiar programming languages (like Python or TypeScript), enabling them to apply robust software engineering practices like testing, abstraction, and advanced logic to their infrastructure.
• For Kubernetes-native environments, Crossplane is better. It transforms your Kubernetes cluster into a universal control plane, allowing you to manage cloud infrastructure using the same GitOps workflows you use for your applications.
• For single-cloud simplicity, AWS CloudFormation or Azure Bicep are better. They offer seamless integration, day-one support for new services, and managed state, which simplifies operations for teams fully committed to one cloud.
• For multi-cloud operations, Terraform/OpenTofu remains the best-in-class solution. Its mature, extensive provider ecosystem and simple declarative language (HCL) make it the most powerful and flexible tool for managing diverse infrastructure across multiple providers.

Who competes with Terraform?

Terraform faces competition on several fronts:

• Direct Engine Competitors: These are tools that also provision infrastructure but use a different approach. The main competitors are Pulumi, Crossplane, and native cloud tools like AWS CloudFormation and Azure Bicep.
• Open Source Successor: OpenTofu is a direct fork and community-governed successor that competes for users who prioritize a truly open-source license and community-driven development.
• Management Platform Competitors (for Terraform Cloud): These platforms don't replace the Terraform engine but compete to manage its workflows at scale. The leading competitors are Spacelift and Scalr. GitLab also competes here with its integrated platform features.
• Adjacent Tools (Not Direct Competitors): Ansible and Salt are not direct competitors. They are configuration management tools used for tasks after infrastructure has been provisioned by a tool like Terraform.

What is the successor of Terraform?

For the open-source community, the definitive successor is OpenTofu. Following HashiCorp's switch to the Business Source License (BSL), a coalition of companies and community members created OpenTofu as a truly open-source (MPL 2.0), community-governed fork. It is managed by the Linux Foundation to ensure it remains open forever. As a drop-in replacement for Terraform, it is the intended successor for anyone who values a community-led project and a stable open-source license.

Is Ansible better than Terraform?

No, because they are designed for completely different jobs. It's like asking if a hammer is better than a screwdriver.

• Terraform is for provisioning (Day 0). Its job is to create, modify, and destroy core infrastructure resources like virtual machines, networks, and databases.
• Ansible is for configuration management (Day 1+). Its job is to install software, manage files, and configure services on infrastructure that already exists.

They are complementary and are most powerful when used together. The most common pattern is to use Terraform to build the servers and then use Ansible to configure the software on them.