Terraform vs. OpenTofu: An In-Depth Comparison for Your IaC Strategy in 2024

The world of Infrastructure as Code (IaC) was rocked in August 2023 when HashiCorp announced a license change for its flagship product, Terraform, moving it from the open-source Mozilla Public License (MPL 2.0) to the source-available Business Source License (BSL 1.1). This decision sent ripples through the DevOps community and directly led to the birth of OpenTofu, a community-driven, open-source fork of Terraform.

For years, Terraform has been the undisputed king of IaC. But now, with a viable, community-backed alternative, a critical question emerges for engineering leaders, DevOps professionals, and platform engineers: Which tool is the right choice for your IaC strategy in 2024 and beyond?

This post provides an in-depth, unbiased comparison of Terraform and OpenTofu. We’ll dissect their core differences, from licensing and governance to feature development and ecosystem, empowering you to make an informed decision for your organization.

Table of contents

The Fork in the Road: A Brief History

To understand the comparison, you must first understand the “why.”

• Terraform’s Dominance: Created by HashiCorp, Terraform became the de-facto standard for declarative infrastructure management. Its simple syntax (HCL), vast provider ecosystem, and powerful state management capabilities made it a favorite among DevOps teams.
• The License Change: In August 2023, HashiCorp switched Terraform to the BSL 1.1. While the code remains “source-available,” the BSL restricts commercial use that competes with HashiCorp’s own products, primarily Terraform Cloud. This move was aimed at protecting HashiCorp’s commercial interests but was met with significant concern from the open-source community.
• The Birth of OpenTofu: In response, a coalition of companies that built their businesses around Terraform’s open-source nature (including Gruntwork, Spacelift, and Env0) initiated the OpenTofu project. It was quickly adopted by the Linux Foundation, guaranteeing it would remain truly open-source (under the MPL 2.0 license) and community-governed. OpenTofu (often abbreviated as opentf) started as a drop-in replacement for Terraform 1.5.x, ensuring immediate compatibility for existing users.

Core Similarities: What Hasn’t Changed?

At its core, OpenTofu is a fork of Terraform. As such, the foundational user experience remains nearly identical, especially if you are familiar with Terraform versions prior to 1.6.

• Declarative Syntax: Both tools use HashiCorp Configuration Language (HCL). Your existing .tf files are fully compatible with OpenTofu.
• Core Workflow: The init, plan, apply, destroy workflow is the same. The only difference is the command: you run tofu instead of terraform.
• Providers and Modules: OpenTofu maintains compatibility with the vast majority of existing Terraform providers and modules. It initially used a proxy to the Terraform Registry and is now building its own independent registry.
• State Management: The concept of a state file, which maps your configuration to real-world resources, is central to both tools. OpenTofu can manage state files created by Terraform and vice-versa (for compatible versions).

Key Differences: Terraform vs. OpenTofu

While the day-to-day commands are similar, the strategic differences are significant. These are the factors that should drive your decision.

1. Licensing: BSL vs. MPL 2.0

This is the most fundamental differentiator.

• Terraform (BSL 1.1): The Business Source License is “source-available.” You can freely view, modify, and distribute the code. You can also use it for free in production. However, you cannot use it to create a product or service that competes with HashiCorp’s commercial offerings. For most internal DevOps teams, this is not an issue. But if you’re a vendor building a competing SaaS platform, or if your legal team is wary of vendor lock-in and future license changes, the BSL is a major red flag.

• OpenTofu (MPL 2.0): The Mozilla Public License is a well-established, OSI-approved open-source license. It is permissive and ensures that OpenTofu will remain open-source forever. There are no restrictions on commercial use, embedding, or creating competitive products. This provides long-term stability and predictability.

Verdict: For enterprises prioritizing true open-source and avoiding any potential licensing ambiguity, OpenTofu has the clear advantage.

2. Governance and Community

How a project is governed dictates its future.

• Terraform: Governance is corporate-led. HashiCorp single-handedly controls the project’s roadmap, prioritizes features, and accepts contributions. This can lead to faster, more focused development but can also mean that community-requested features are ignored if they don’t align with HashiCorp’s commercial strategy.
• OpenTofu: Governance is community-driven under the neutral stewardship of the Linux Foundation. The technical steering committee includes members from multiple companies and the community at large. The roadmap is public, and features are decided upon transparently. This democratic approach ensures the tool evolves in the direction its users want, but it can sometimes lead to slower decision-making processes.

Verdict: If you value transparency and a voice in the tool’s direction, OpenTofu’s model is more appealing. If you trust HashiCorp’s vision and prefer a single, decisive authority, Terraform’s model is effective.

3. Feature Development and Roadmap

This is where the paths are truly diverging. Since the fork, OpenTofu has already implemented features that were long-requested by the Terraform community.

A prime example is client-side state encryption. For years, users asked for a way to encrypt the state file locally before sending it to a remote backend like AWS S3. Terraform did not implement this, as it’s a key feature of its paid Terraform Cloud offering.

OpenTofu, driven by community demand, added this in version 1.7.0. Here’s how you would configure it in your backend block:

# main.tf - Example of OpenTofu's client-side state encryption

terraform {
  backend "s3" {
    bucket         = "my-opentofu-state-bucket"
    key            = "prod/terraform.tfstate"
    region         = "us-east-1"
    encrypt        = true # This is standard S3 server-side encryption

    # OpenTofu 1.7+ specific feature: client-side encryption
    state_encryption {
      # The 'aes_gcm' block enables AES-GCM encryption.
      # The key is sourced from the OTF_STATE_ENCRYPTION_KEY environment variable.
      aes_gcm {}
    }
  }
}

This feature, along with others like improvements to tofu test, shows OpenTofu’s commitment to delivering what the community wants, unbound by a corporate-commercial strategy. Terraform, meanwhile, continues to innovate, focusing on deeper integration with its commercial ecosystem.

Verdict: OpenTofu is gaining an edge on community-centric features. Terraform’s development is tightly coupled with its powerful commercial ecosystem, like Terraform Cloud and integrations with tools like Datadog.

4. The Registry and Ecosystem

• Terraform: The Terraform Registry is a mature, extensive, and official source for thousands of providers and modules. It’s a cornerstone of the Terraform ecosystem.
• OpenTofu: OpenTofu has established its own public registry. For now, it provides transparent access to the same providers and modules you’re used to. The long-term goal is to build a completely independent, community-governed registry. This is a massive undertaking, and its success will be critical for OpenTofu’s future.

Verdict: Terraform currently has the more mature and established registry. The OpenTofu registry is fully functional but is still in its early stages of building a truly independent ecosystem.

Making the Switch: Migrating from Terraform to OpenTofu

For those considering a move, the migration process is surprisingly straightforward, as OpenTofu was designed to be a drop-in replacement.

Here’s a typical migration workflow on a developer’s machine:

# 1. Ensure your Terraform state is synced and code is clean
terraform apply # Run one last time to ensure no drift

# 2. Uninstall Terraform
# (This process varies by OS and installation method, e.g., brew, apt)
# Example using Homebrew on macOS:
brew uninstall terraform

# 3. Install OpenTofu
# Example using Homebrew on macOS:
brew install opentofu

# 4. In your project directory, simply replace 'terraform' with 'tofu'
# Re-initialize to pull providers into the OpenTofu cache
tofu init

# 5. Run a plan to verify that OpenTofu sees no changes
tofu plan
# Expected output: "No changes. Your infrastructure matches the configuration."

# 6. You're done! You can now use 'tofu' commands.
tofu apply

The process is similar for CI/CD pipelines, such as in GitHub Actions, where you would simply swap the setup-terraform action for a setup-opentofu action or use a different Docker image.

Feature Comparison at a Glance (2024)

Which Should You Choose in 2024?

The choice is no longer automatic. It depends on your team’s priorities.

Stick with Terraform if:

• You are deeply invested in Terraform Cloud or Terraform Enterprise and rely on its advanced features.
• Your organization’s legal team is comfortable with the BSL 1.1 license.
• You value the stability and support that comes from a single, large corporate backer.

Choose OpenTofu if:

• You or your organization have a strong philosophical or legal requirement for a true, OSI-approved open-source license.
• You want to avoid any risk of vendor lock-in or future licensing changes.
• You want access to community-prioritized features (like client-side state encryption) that may not align with Terraform’s commercial model.
• You are building a commercial product that might compete with HashiCorp’s offerings.

For New Projects: If you are starting a new project from scratch, OpenTofu is an incredibly compelling choice. It offers the battle-tested core of Terraform under a truly open-source license, backed by a vibrant community and a transparent governance model. It represents a safe, future-proof bet in the IaC space.

Conclusion

The fork of Terraform into OpenTofu has permanently altered the IaC landscape. It has shifted the conversation from “Which tool?” to “Which philosophy?”.

Do you prefer the focused, integrated, but commercially-driven ecosystem of HashiCorp’s Terraform? Or do you favor the transparent, community-governed, and truly open-source future promised by OpenTofu?

Both tools are powerful, mature, and capable of managing complex infrastructure. The decision now rests on your organization’s values, risk tolerance, and long-term strategy. The good news is that competition breeds innovation, and the evolution of both tools will ultimately benefit the entire DevOps community.

What are your thoughts? Have you made the switch, or are you sticking with Terraform? Share your experiences and decision-making process in the comments below!