The economics of Terraform 1.9 and the pull of Pulumi

The BSL license and the OpenTofu response

The 2023 shift to the Business Source License 1.1 changed the economics of the infrastructure as code market. This change forced companies to re-evaluate long-term vendor relationships with HashiCorp. DuploCloud noted that the ambiguous language in the license creates legal risks for teams embedding Terraform in CI pipelines. OpenTofu emerged as a direct response to this licensing shift. It remains a drop-in replacement for version 1.5.5 users who want to avoid corporate gatekeeping.

HashiCorp released Terraform 1.16.3 on September 16, 2026, following the 1.15.9 release in August. These updates include Terraform Stacks, which group different Terraform cloud infrastructure modules to centralize maintenance and interdependency tasks. While HashiCorp released Terraform 1.16.3 on September 16, 2026, many organizations continue to rely on the OpenTofu fork because it provides a community-governed, open-source alternative under the permissive MPL 2.0 license. This stability matters because IBM acquired HashiCorp for $6.4 billion in February 2025. OpenTofu remains a community-maintained fork that uses the same HCL syntax and state format as Terraform.

Programming languages and provider parity

Terraform maintains 4,800 providers in its registry, which is 2.7 times larger than the 1,800 providers found in the Pulumi registry according to the June 2026 market studies. Pulumi bridges this gap using the pulumi-terraform-bridge project to access the larger Terraform ecosystem. The choice between these tools hinges on whether a team prefers HashiCorp Configuration Language or a general-purpose language like Python or TypeScript. You know that HCL is easy for operations staff to read, but it lacks the depth of a true programming language.

Pulumi allows users to use existing package managers like npm or PyPI to handle dependencies. This capability allows developers to use unit testing frameworks like Jest or pytest directly on their infrastructure code. Pulumi also includes the Automation API, which lets developers drive deployments from inside another program. This is useful for building internal developer platforms. Terraform does not have a programmatic equivalent. Will the diverging development paths of OpenTofu and Terraform eventually break the compatibility that makes the fork useful?

Cloud management and resource pricing

Companies face different cost structures depending on whether they use managed services or self-hosted backends. Terraform Cloud Essentials bills at $0.10 per resource per month. Pulumi Cloud Essentials costs $40 per month and charges an overage rate of $0.1825 per resource per month. The Pulumi Team Edition follows a credit model where one credit covers one resource for one hour at $0.0005 per credit. The per-resource-hour pricing in Pulumi’s Team Edition creates resistance to experimentation for teams that need to create many ephemeral resources.

Market share data from 2026 shows that Terraform still holds a significant lead. A Hakia review of CNCF 2024 data shows Terraform at 76% market share, while Pulumi holds 12%. However, Pulumi showed 45% year-over-year growth among developer-focused teams. ComputingForGeeks reported Terraform’s market share at 32.8% in August 2026. Organizations choose Terraform for its massive provider registry and large hiring pool. Teams choose Pulumi when they require complex logic, native testing, or programmatic orchestration via the Automation API.