Terraform Cloud is now IBM HCP Terraform

As we approach the one-year anniversary of IBM’s acquisition of HashiCorp on February 27, 2026, the product landscape has seen significant rebranding—often referred to as "bluewashing"—even as pricing remains consistent with the June 2023 structures.

IBM has integrated the managed suite into the IBM HashiCorp Cloud Platform (HCP). Per HashiCorp’s website: On September 1, 2025 all HashiCorp business operations were transitioned to IBM. This exciting milestone included updates to product naming conventions to align with the broader IBM Automation portfolio. No product features or functionality were changed. Consequently, the following name changes are now official:

• Terraform Cloud is now IBM HCP Terraform
• Terraform Enterprise is now IBM Terraform Enterprise

Despite these official updates, this document will use the more familiar and colloquial names Terraform Cloud (TFC) and Terraform Enterprise (TFE) for the sake of clarity and brevity.

Recent Changes to Terraform Cloud Pricing

In June 2023, HashiCorp (now IBM HashiCorp) adjusted the pricing scheme of Terraform Cloud, its commercial SaaS product and core component of the HashiCorp Cloud Platform. The main change was a shift to the Resources Under Management (RUM) model, which calculates service costs based on how many resources are connected to Terraform (buckets, load balancers, instances, clusters, etc.) rather than by the number of users.

The change was met with a mixed response, as it meant savings for some, but higher charges for others.

Moreover, about two months later, HashiCorp also made changes to the Terraform license, shifting it from open-source to the BSLv2 license, leading to further concerns about future costs and other implications of vendor lock-in.

In 2025, IBM HashiCorp discontinued offering the Terraform Cloud Free tier, which included 500 RUM and 1 concurrent run. In its place, each of the new tiers: Essentials, Standard, and Premium now include a $500 trial credit, which is consumed at the prevailing rate of the tier you are using. Additionally, HashiCorp has appeared to remove cost estimation—a feature that provided a priori cost estimations for IaC changes—from all of its tiers. This is unsurprising given the robust cost optimization solutions that exist elsewhere in the IBM portfolio like Apptio, Kubecost, and Turbonomic.

In this guide, we will take a deep dive into HashiCorp Terraform Cloud's pricing model, review its implications and discuss the pros and cons of the current pricing scheme.

What is the RUM (Resources Under Management) Model?

The Resources Under Management (RUM) model bases service costs on the number of resources you manage through Terraform Cloud. A "managed resource" has a specific definition. It's a resource in an HCP Terraform-managed state file where mode = "managed". The count starts from your first plan or apply operation.

These resources include:

• Cloud instances
• Kubernetes clusters
• Security groups
• Security group rules
• IAM users
• Policies
• Roles
• … Almost any infrastructure component you set up with Terraform

The RUM model leaves out some resource types from your bill. Resources marked as null_resource or terraform_data don't add to your total managed resource count. This makes a big difference when you estimate costs, especially if you have complex infrastructure.

You pay for each managed resource by the hour from setup to removal. Any partial hour counts as a full hour. The system looks at your peak number of managed resources each hour to figure out your cost.

Here is an example of how it works...

Suppose a team created 2,000 resources at 3:05 pm. At 3:30 pm, the team destroyed 500 resources, leaving 1,500 managed resources in the Terraform Cloud workspace.

Terraform pricing focuses on the peak number of resources provisioned in an hour (in this case, 2,000) instead of the 1,500 currently managed in the Terraform Cloud.

In an Essentials tier plan (detailed in the section below), their hourly pricing would look like this:

• 2,000 resources under management = 1 hour x 2,000 resources x $0.00013 per resource per hour = $0.26

Breakdown of Terraform Cloud Pricing Tiers

HashiCorp's Terraform Cloud comes with different pricing tiers that grow with your infrastructure needs. Each tier brings specific features tailored to match what organizations need, whether you're a small team or a large enterprise.

Essentials Tier: $0.10 per Resource per Month

Teams that are just getting started with infrastructure as code provisioning should look at the Essentials tier. This first paid tier costs about $0.10 per resource monthly (or $0.00013 per resource hourly), and includes a $500 HCP trial credit.

The Essentials tier includes:

• Remote state storage and VCS integration
• Private module registry (10 modules)
• Secure variable storage
• Remote plan and apply operations
• Policy as code with advisory enforcement (1 policy set with up to 5 policies)
• Single-sign-on (SSO) features
• Team management tools
• 3 concurrent runs and 1 self-hosted agent
• Flexible enterprise support choices
• Test-integrated module publishing for up to 10 modules

The billing happens hourly based on peak resource usage instead of averages. Managing 1,000 resources would cost around $100 monthly.

Importantly, the Essentials plan comes with significant feature limitations and does not include essential capabilities like drift detection, audit logging, or ephemeral workspaces which could be a deal breaker for some teams.

Standard Tier: $0.47 per Resource per Month

The Standard tier takes the Essentials features further with better governance and team tools. At $0.47 per resource monthly (or $0.00064 per resource hourly), you get everything from Essentials tier plus:

• Private module registry (Unlimited modules)
• Drift detection to monitor configurations
• No-code provisioning for self-service infrastructure
• Audit trails API
• Unlimited Sentinel and OPA policies
• Better team management with detailed permissions
• 10 concurrent runs and 10 self-hosted agents
• Workspace management and explorer tools
• Waypoint templates and add-ons
• Module deprecation options

Organizations that need stronger governance controls while managing multiple infrastructure teams will find this tier useful. Managing 1,000 resources would cost around $470 monthly.

Premium Tier: $0.99 per Resource per Month

Organizations with complex needs can opt for the Premium Tier. Scrutinizing the differences between Standard and Premium, Premium offers more rigorous security and higher concurrency. The Premium tier costs $0.99 per resource monthly (or $0.00135 per resource hourly) and adds:

• Private VCS access
• Private policy enforcement
• Private run tasks
• Hold your own (HYOK)
• 200 concurrent runs and 300 self-hosted agents
• Custom deployment groups (“Stacks”)
• Waypoint actions

Organizations will need to decide their specific needs to determine if the 111% price premium over TFC Standard is justified. Managing 1,000 resources would cost around $990 monthly.

Terraform Enterprise Cost and Self-Hosting Option

Terraform Enterprise lets organizations host their own solution, and comes with all Terraform Cloud's paid features plus extra enterprise capabilities, though setup differs since it's self-hosted. Though pricing has been published by other sources, env zero does not have enough confidence in those rates to publish them here. Terraform Enterprise customers get premium support with their package. They can also negotiate better rates with multi-year deals and growth plans.

Why Upgrade to Terraform's Cloud Plan?

Before diving into different pricing scenarios, let's quickly review the reasons why companies choose to go for Terraform Cloud (TFC) when the free Terraform CLI works perfectly in managing their Infrastructure-as-Code (IaC).

The answer to this comes down to additional management and automation features, which would be required for Terraform to operate at scale. These include:

1. Role-Based Access Control – a way to delegate access to infra engineers.
2. Policy Enforcement – Integrations with Sentinel or open-source tools like OPA.
3. Private Module Registry – an option to set up and maintain a private module registry.
4. Remote State Management – a secure location to store state files.

It's important to note that TFC does not offer self-hosting; if you want that, you have to go for Terraform Enterprise (TFE), which adds additional features like airgapped network deployment and comes at a custom price.

Understanding the New Terraform Cloud Pricing Model

Up until recently, Hashicorp had a cost structure with three SaaS tiers (Free, Standard, Plus) based on a resources under management pricing model, emphasizing the number of provisioned IaC resources that are managed by Terraform Cloud.

The current TFC cost structure maintains three tiers (Essentials, Standard, Premium) but eliminates any “free forever” offering in lieu of a $500 trial credit, which is consumed at the prevailing rate of the tier your organization is using. 

The no longer available Free tier allowed infra engineers to manage their first 500 resources free of cost every month, which was quite valuable to smaller teams. The new $500 credit is depleted quickly by comparison, as illustrated below:

For an organization with 500 resources (the previous limit of the Free tier), the $500 credit will be consumed:

• Essentials: Within 10 months ($500 credit / 500 resources / $0.10 per resource per month)
• Standard: Within 2.1 months ($500 credit / 500 resources / $0.47 per resource per month)
• Premium: Within 1 month ($500 credit / 500 resources / $0.99 per resource per month)

With these details out of the way, let's run a few scenarios to showcase the difference between the old and new pricing structure.

Challenges and Considerations with RUM Pricing

The RUM pricing model has its benefits, but teams face major hurdles during implementation. Let's get into what you should think over before choosing this approach.

Unpredictable Billing Due to Resource Spikes

The RUM model bases its charges on hourly peak usage instead of averages, which can lead to budget surprises. Your bill calculates at the 2,000-resource rate if your environment scales up to 2,000 resources temporarily during any hour. Monthly costs become highly unpredictable, even for teams with stable infrastructure. Some organizations say their Terraform Cloud costs are almost equal to their AWS resource expenses.

Lack of Real-Time Usage Visibility

The billing updates don't happen right away or even soon after changes. Teams can't see how infrastructure changes affect their costs immediately, which makes managing expenses harder. Unexpected charges become unavoidable without constant monitoring of resource counts across workspaces. DevOps teams need better visibility to stay within budget under these pricing plans.

Hidden Costs from Security Group Rules and IAM Policies

Small components like security group rules, IAM policies, and S3 lifecycle rules count as separate resources. Costs increase faster this way—managing a security group with nine rules costs almost $1.00 monthly. Organizations with lots of security group rules and IAM policies feel a bigger impact from the RUM pricing model.

Concurrency Bottlenecks in Essentials Tiers

Terraform Cloud's Essentials plan limits you to one concurrent run, so only one operation can happen at a time. Team members face delays when they try to make changes at the same time. Teams wait in queue while runs process. Organizations that need multiple parallel workflows must pay more by upgrading to higher tiers.

Responses to Terraform Cloud Price Changes

From the above examples, it is evident that startups or comparatively smaller companies that used to manage infrastructure as code with under 500 resources will miss the Free tier.

However, as the number of resources under management grows, there is an inflection point at which the new by-resource model becomes costly than previous models or alternative products.

For instance, this small development team reported a steep cost increase due to the pricing changes for TFC. Initially paying a manageable fee of $20 per user per month, they saw a significant jump to around $250 monthly for managing their development, test, and production environments, which include approximately 700 resources.

This was echoed by other users, over at Reddit, who also described pricing hikes as a result of redundant instances:

Others still had more vocal concerns, as in this case where the new RUM pricing model "hit" a small team operating a robust infrastructure:

The new TFC pricing had mixed results: good for some, but not so great for others, which is pretty common with changes in prices.

env zero Pricing - Pay by Successful Deploy or Active Environment

Instead of employing Terraform Cloud's RUM model, env zero presents (what we believe to be) the most flexible deployment or environment-based pricing model. In the env zero pricing model, a deployment is counted as a successful terraform apply and does not include Terraform plans, drift detection, or destroys. An active environment is counted as an active (running) Terraform Workspace. The relationship between prices for deployments and environments are based on average usage from real env zero customers, and we work with each customer to ensure they have the most equitable and predictable pricing schema for their organization’s setup.

This approach to pricing provides greater predictability and enables smooth operations at a larger scale. Beyond cost efficiencies, env zero provides enhanced functionalities, including:

• Automated drift detection and remediation
• Tools for cost management
• Dynamic role-based access controls‍
• Flexible Policy-as-Code guardrails
• Ready-to-use policies and static code analysis

and more.

Check out this page to see what makes env zero the best Terraform Cloud alternative, or book a technical demo with the team to see the platform in action.

Conclusion

The Resource Under Management (RUM) pricing model for HashiCorp Terraform Cloud proves advantageous for smaller organizations or startups, particularly those operating within the confines of the 500 resource limit or close to it.

Conversely, its implications are notably burdensome for larger operations, given the escalating costs incurred by managing a large set of infrastructure resources under Terraform Cloud. When comparing options, it's worth considering alternatives like Spacelift pricing, which may offer different models for certain use cases.

As organizations evaluate their infrastructure management needs, it's crucial to consider not only the Terraform Cloud cost but also the features provided by the HashiCorp Cloud Platform as a whole. While the Terraform Cloud Essentials tier offers a starting point for smaller teams, larger enterprises may need to carefully weigh the benefits against the potential increase in Terraform Cloud Premium cost as their resource usage grows.