Two days ago, HashiCorp announced that Terraform — and all their products — would switch from the Mozilla Public License (MPL 2.0) to the Business Source License (BSL 1.1). The news dropped on August 10th and the internet hasn’t stopped arguing about it since.

I have complicated feelings about this one.

What Actually Changed #

BSL isn’t proprietary, exactly. You can still read the source code. You can still use Terraform for your own infrastructure. What you can’t do is offer a competing commercial service built on HashiCorp’s code without their permission. After four years, the code converts to MPL 2.0 automatically — the “change date” mechanism.

The practical impact lands squarely on companies like Spacelift, Env0, and Scalr. These businesses built managed Terraform platforms. Under MPL, they were within their rights. Under BSL, they need HashiCorp’s blessing.

HashiCorp’s stated rationale is straightforward: cloud providers and other vendors were taking their open-source code, wrapping it in a managed service, and capturing revenue that HashiCorp felt should be theirs. It’s the same argument Redis Labs made, the same argument MongoDB made, the same argument CockroachDB made. The pattern is familiar enough to have its own name: the “open-source bait and switch.”

Except I don’t think it’s that simple.

The Strategy Argument #

If I put on my CTO hat — which I’ve been wearing a lot lately, job hunting in this market — HashiCorp’s move makes business sense. They’re a public company. Revenue growth matters. And watching competitors monetize your code while you bear the cost of development? That’s a real problem.

BSL is arguably the most developer-friendly of the non-open-source alternatives. It preserves source availability. It has an automatic conversion clause. It explicitly allows non-competing use. Compared to a full proprietary pivot, this is measured.

And let’s be honest: most Terraform users won’t notice any difference. If you’re using Terraform to manage your company’s infrastructure, nothing changes. The BSL restriction only applies to people building competing commercial products.

The Community Argument #

Here’s where it gets uncomfortable. Open source isn’t just a license. It’s a social contract.

When HashiCorp adopted MPL, they attracted contributors, community modules, blog posts, conference talks, training materials — an entire ecosystem built on the assumption that Terraform was and would remain open source. People invested time and careers in that ecosystem partly because the license guaranteed their investment was safe.

BSL breaks that guarantee. And the reaction has been fierce. The OpenTF manifesto — calling for HashiCorp to return to a truly open-source license — is already gathering momentum. Last I checked, over a hundred companies had signed it. That’s not nothing.

The deeper problem is precedent. Every successful open-source project now has to answer the question: “Will they pull a HashiCorp?” And every potential contributor has to wonder whether their patches and modules will eventually end up behind a license they didn’t agree to.

Where I Land (For Now) #

I genuinely see both sides. I’ve run startups; I know what it feels like to watch someone else monetize your work. I’ve also built on open-source tools with the assumption that the license meant something.

If I had to bet, I’d say this accelerates a pattern we’ve been watching for years. More companies will launch with permissive licenses to build community, then tighten the license once they have market share. The era of “venture-funded open source” may be ending — not because it failed, but because it succeeded too well. The communities built real value, and now the companies want to capture it.

What bothers me most isn’t the business decision. It’s the timing. HashiCorp could have started with BSL. They chose not to. They chose to benefit from community contributions under MPL for years and then changed the terms. That feels different from a startup choosing BSL on day one.

The OpenTF manifesto asks HashiCorp to reconsider. I doubt they will. But the conversation it’s forcing — about what “open source” means, who benefits, and what obligations come with community-built software — that conversation is overdue.

I’m watching this one closely. Something tells me the fallout has barely started.