Terraform vs Pulumi
Terraform is a declarative tool now owned by IBM, with a Business Source License on versions from 1.6.0 and cloud billing counted per managed resource. Pulumi lets you write infrastructure in Node.js, Python, Go, .NET, Java or YAML under an Apache 2.0 SDK, with a published plan ladder from a free single-user tier. Both bill by managed resources in their clouds, so estimating your resource count matters more than the headline rate. The licence and the language model are the real fork.
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Choose Terraform ifyou already run Terraform modules, accept a source-available licence, and want a vendor that offers a self-managed Enterprise route and a Europe-located cloud by quote. You should model the per-resource bill before moving a large estate.
Choose Pulumi ifyou want loops, types and tests in a normal programming language and an open-source SDK you can run without the vendor cloud. You are prepared to take on state handling yourself if you skip Pulumi Cloud.
Terraform and Pulumi side by side
| Terraform | Pulumi | |
|---|---|---|
| Our infrastructure as code tool rank | #5 of 12 | #2 of 12 |
| Established in | United States | United States |
| List price, 6 November 2026 | Per managed resource per month on HCP Terraform: from $0.10, $0.47 and $0.99 by tier; $500 trial credit; Enterprise quoted | Free for 1 user; Essentials $40 a month (500 resources), Pro $400 (2,000), Enterprise custom contract |
| Free tier | — | Yes |
| Open source | — | Yes |
| Self-hostable | Yes | — |
| Built for | Organisations already standardised on Terraform modules and HashiCorp tooling | Developers who want loops, tests and types in a normal language |
| Not for | Teams that need an OSI open-source licence or a vendor-neutral owner | Operators who want a purely declarative file format |
Both are reviewed in full in our infrastructure as code tool ranking: Terraform and Pulumi.
Where they differ
Terraform 1 · Pulumi 4 · open 1- 01
Licence terms you inherit
Terraform 1.6.0 and later is under the Business Source License 1.1 with IBM as licensor and MPL 2.0 as the change licence. The use grant bars hosted or embedded offerings that compete with IBM's paid versions, though internal use is not competitive. Pulumi's CLI repository is under the Apache License 2.0, a plain open-source licence. For a company that wants no restriction on how it may resell or embed the tool, Pulumi is cleaner.
Edge: Pulumi
- 02
Writing the code itself
Terraform's intro describes a write, plan, apply loop, a resource graph that applies changes in parallel, and a state file as source of truth, with providers including AWS, Azure, Google Cloud and Kubernetes. Pulumi's home page offers infrastructure as code for any cloud in Node.js, Python, Go, .NET, Java and YAML. Which is better depends on whether your team prefers a declarative file or a general-purpose language, so this round is a draw.
Depends on the buyer
- 03
Counting resources on the invoice
HCP Terraform lists Essentials from $0.10 per resource a month, Standard from $0.47 and Premium from $0.99, with prices starting at those figures and varying by volume. Pulumi lists Essentials at $40 a month with 500 managed resources, Pro at $400 with 2,000, and an on-demand resource at $0.1825 a month. Pulumi's published rate and included allowances are easier to model, while Terraform's rates are quoted as starting points.
Edge: Pulumi
- 04
Free tier and trial credit
Terraform's pricing page carries no free plan in its text, yet offers a $500 HCP trial credit, and the docs say free organisations are limited to 500 managed resources. Pulumi has a free edition at $0, no card needed, for 1 user with unlimited projects and stacks, 500 workflow minutes and 1 concurrent stack update. Pulumi's paid plans carry a 14-day money-back guarantee rather than a trial.
Edge: Pulumi
- 05
Running it in your own estate
Terraform Enterprise is the self-managed option, priced by contacting sales with premium support included, and HCP Terraform Europe is offered at custom pricing. Pulumi puts self-hosting on its Enterprise tier, which also adds SCIM, audit log export and customer-managed runners, and lets you request a self-hosted proof of concept. Both gate self-hosting behind a sales conversation, and only Terraform names a Europe cloud option.
Edge: Terraform
- 06
Ownership and company address
HashiCorp became part of IBM on 27 February 2025, and the HashiCorp privacy page says it is headquartered in the United States. Pulumi's contact page gives Pulumi Corporation at 601 Union St., Seattle, and the legal page names Pulumi Corp. as copyright holder without stating a parent. Both are American, but Pulumi is an independent company on the pages we read, while Terraform sits inside a large parent.
Edge: Pulumi
When neither fits
If a vendor-neutral owner and an OSI licence are the first requirement, neither fits cleanly. OpenTofu is the open-source fork route, and Spacelift is worth a look when you want a platform around the tooling rather than the tool alone.
Terraform or Pulumi: questions
3 answersDoes the Terraform licence stop me using it at work?
Internal use is described as not competitive, so running Terraform inside your own company is allowed. The restriction targets hosted or embedded offerings that compete with IBM's paid versions. If you resell infrastructure automation, read the use grant closely.
Can Pulumi run without its paid cloud service?
The SDK is Apache 2.0, so you can run it without Pulumi Cloud, but then state handling becomes your job. Pulumi Cloud adds state and policy features. Self-hosting of the cloud service itself is listed only on Enterprise.
Which one has the cheaper entry point for a team?
Pulumi's free plan covers one user, and Essentials is $40 a month for unlimited users with 500 managed resources.
Terraform's HCP rates start at $0.10 per resource a month, and free organisations are capped at 500 resources. For a small team the two are close, so count your resources first.
Sources
Checked 6 November 2026- HashiCorp Terraform pricing: HCP tier rates, trial credit, Enterprise and Europe quotes, and the self-managed versus cloud split.
- HCP Terraform docs overview: the 500 managed resource cap on free organisations.
- Terraform LICENSE on GitHub: Business Source License 1.1, IBM as licensor and the MPL 2.0 change licence.
- Terraform intro: write, plan, apply workflow, resource graph, state file and named providers.
- HashiCorp privacy page: IBM acquisition on 27 February 2025 and a United States headquarters.
- Pulumi pricing: free edition limits, Essentials and Pro prices, resource allowances, self-hosting on Enterprise and the 14-day guarantee.
- Pulumi home page: the six supported languages.
- Pulumi CLI LICENSE: Apache License 2.0 on the CLI repository.
- Pulumi contact page: Pulumi Corporation address in Seattle.