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Terraform path · At scale · Topic 14 of 14

OpenTofu and the licence change

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On 10 August 2023 HashiCorp announced that future releases of Terraform (and its other products) would be published under the **Business Source License 1.1** instead of the **Mozilla Public License 2.0**. The BSL is a source-available licence that restricts using the software to build competing commercial offerings. In response, a group of vendors and community members published the OpenTF manifesto, then forked the last MPL code base. The fork was renamed **OpenTofu**, accepted by the **Linux Foundation** in September 2023, and released as stable 1.6.0 in January 2024. IBM completed its acquisition of HashiCorp in February 2025; Terraform remains under the BSL.

Why it matters: Since 2023 there are two compatible-but-diverging tools: Terraform under the Business Source License and OpenTofu under MPL 2.0. Choosing between them, or switching, is now a real decision for teams.

  1. 1The licence changed in August 2023

    HashiCorp moved Terraform from MPL 2.0 to the Business Source License 1.1 for releases after 1.5.x. Terraform 1.5.7 is the last MPL release.

  2. 2OpenTofu forked from 1.5

    A group of companies and contributors forked the last MPL code as OpenTofu, now a Linux Foundation project; its first stable release was 1.6.0 in January 2024.

  3. 3Compatible, then diverging

    Both read the same HCL, providers and state format from that era. Since then each has added features the other lacks.

  4. 4Decide on facts

    Check what your use case needs: the licence terms, features, the providers and modules you use, support, and HCP Terraform integration.

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How it works

The explanation, with examples you can run.

What is the same

  • The language: HCL configurations written for Terraform 1.5 work in OpenTofu, and most later configurations that avoid tool-specific features work in both.
  • Providers: both use the same provider plugin protocol. Most providers are published to both the Terraform Registry and the OpenTofu Registry (registry.opentofu.org).
  • State: OpenTofu works with state files written by Terraform up to 1.5.x; for state from later Terraform releases, follow the migration guide and verify with a plan.
  • Workflow: tofu init, tofu plan, tofu apply, the same as terraform.

What has diverged

Each project now ships features the other lacks. A few examples, not a complete list:

OpenTofuTerraform
Client-side state and plan encryption (1.7)Ephemeral resources (1.10) and write-only arguments (1.11)
Early evaluation: variables in backend and module source blocks (1.8)Stacks and deeper HCP Terraform integration
for_each on provider configurations (1.9), -exclude flagQuery (list) blocks for discovering existing resources to import
OCI registries for providers and modules (1.10)

Feature sets change with every release, so check the current documentation for anything you depend on. Configuration that uses features of one tool will not run on the other.

Choosing, neutrally

Questions worth answering for your team:

  • Licence: does the BSL affect you? For most companies managing their own infrastructure, HashiCorp's terms permit that use; vendors building products around Terraform are the main group restricted. Some organisations require OSI-approved licences for all tooling, which only OpenTofu meets.
  • Platform: HCP Terraform and Terraform Enterprise run Terraform. Other platforms (Spacelift, env0, Scalr, Harness, self-hosted CI) commonly support both.
  • Features you need from either column above.
  • Support and governance: a single vendor's roadmap and commercial support, or a foundation-governed project with several backing companies.

Switching

The OpenTofu migration guide describes a safe, reversible process: back up your state and code, install OpenTofu, initialise and verify the configuration (tofu init fetches providers from the OpenTofu Registry, and tofu plan should show no changes), then test with a small change before relying on it. Configurations that share data through terraform_remote_state need extra care, covered in a separate guide. Switching back is possible as long as you have not used OpenTofu-only features such as state encryption. Do it one state at a time, not across the whole estate at once.

Note: the examples in this path were run with Terraform, not OpenTofu (it was not installed); they use only features the two share, except where a version note says otherwise.

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Check yourself

3 questions. Get them all right to finish this topic.

  1. 1.Which Terraform release is the last one under the Mozilla Public License 2.0?
  2. 2.What is a feature OpenTofu added that Terraform does not have?
  3. 3.Does the BSL stop a company from using Terraform to manage its own infrastructure?

0 of 3 right so far. Get all three to finish this topic.

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