How to Manage Your Software Infrastructure with Terraform Cloud

Say hello to Terraform. The modern way to manage infrastructure with the power of code. Whether you're spinning up servers on AWS, wiring networks in Azure, or managing multi-cloud environments, Terraform lets you automate it all. A solution for fast, repeatable, and scalable infrastructure you can trust. In this blog, we’ll break down exactly how Terraform helps teams move faster, stay secure, and build smarter. So you can spend less time worrying about infrastructure, and more time building great software.

Jordan Wu

8 min read·Posted Apr 19, 2025

Terraform

Terraform is an open-source Infrastructure as Code (IaC) tool created by HashiCorp that lets DevOps teams define, provision, and manage cloud infrastructure using simple, human-readable configuration files. Instead of manually setting up resources like servers, databases, or networking components. Terraform allows you to declare what your infrastructure should look like in code. Making it easy to automate deployments, track changes in version control, and ensure consistent environments across development, staging, and production. This approach brings automation, repeatability, and version control to infrastructure management, helping teams reduce errors, speed up deployments, and maintain consistency across environments.

Software Delivery

Software delivery consists of all the work you need to do to make your software application available to customers. Before a software company would manage their own hardwares and have a dedicated team of DevOps engineers that worked on maintaining the infrastructure. Managing infrastructure was largely a manual, time-consuming process. DevOps engineers would manually set up servers, configure networks, install software, and apply updates. Often by logging into machines via SSH or using scripts that were difficult to standardize and maintain.

Infrastructure was typically described in documentation rather than code, which meant configurations could vary across environments, leading to the dreaded “it works on my machine” problem. Deployment processes were slower, error-prone, and hard to reproduce. Scaling infrastructure or making changes required significant effort and coordination, especially as applications grew more complex. This lack of automation and consistency made it difficult for development and operations teams to collaborate effectively, which ultimately slowed down software delivery and increased the risk of outages.

Infrastructure as Code

The idea behind infrastructure as code (IaC) is that you write and execute code to define, deploy, update, and destroy your infrastructure. This shift in mindset in which you treat all aspects of operation as software, including the hardware allows you to manage almost everything in code, including servers, databases, networks, log files, application configuration, documentation, automated tests, deployment processes, and the list goes on. With IaC, you define your infrastructure in configuration files that can be version-controlled, reviewed, shared, and reused. Just like application code. This makes infrastructure automated, consistent, repeatable, and scalable.

Terraform Providers

Terraform providers are plugins that enable Terraform to interact with a wide range of external platforms and services—like cloud providers (AWS, Azure, GCP), SaaS tools (Datadog, GitHub), and infrastructure systems (Kubernetes, Docker). Each provider offers a set of resources and data sources that allow you to define and manage the infrastructure components specific to that service. For example, the AWS provider lets you manage EC2 instances, S3 buckets, IAM roles, and more. Providers act as the bridge between your Terraform configuration files and the actual APIs of the services you're using. You can use multiple providers in a single project, making it easy to orchestrate complex, multi-cloud or hybrid environments all through code.

Check out the Terraform Registry to see what providers are available.

Terraform State

Terraform state is a crucial component that tracks the current state of your infrastructure, storing information about the resources Terraform manages. When you run Terraform commands like terraform apply, Terraform compares the desired infrastructure defined in your configuration files with the actual infrastructure in the state file to determine what changes are needed. The state file contains metadata, such as resource IDs and dependencies, and helps Terraform understand which resources exist, which need to be created or modified, and how they are related. This state can be stored locally or remotely (using Terraform Cloud or other backends) to support collaboration, prevent conflicts, and enable Terraform to manage infrastructure consistently across environments.

Check out Get Started - AWS for more information.

Terraform Cloud

HCP Terraform (HashiCorp Cloud Platform Terraform) is a managed service by HashiCorp that provides a cloud-based platform for running and managing Terraform workflows. It simplifies the process of setting up and maintaining the infrastructure needed to run Terraform, allowing teams to focus on infrastructure provisioning rather than managing the Terraform environment itself. HCP Terraform offers features like remote state management, collaboration, version control, and security for Terraform projects, ensuring that infrastructure is consistent, scalable, and auditable. With HCP Terraform, you can securely run Terraform configurations in a fully managed environment without needing to worry about setting up and maintaining the backend infrastructure yourself, making it a great choice for teams looking to streamline their DevOps and IaC practices.

Securely Managing Infrastructure Secrets

Terraform helps manage infrastructure secrets and environment variables by providing secure and flexible ways to store, reference, and inject sensitive data into your configurations. Through Terraform's integration with secret management tools like HashiCorp Vault, environment variables can be securely retrieved and used within your infrastructure code without hardcoding sensitive values. Terraform variable sets come into play by grouping related variables, including sensitive data, and associating them with specific environments or workspaces. By storing these variables in a variable set, you can manage and apply them consistently across your infrastructure while ensuring sensitive values are kept secure and only accessible in the right contexts. This approach ensures both security and ease of management, as variable sets allow for the reuse of configurations across environments without compromising sensitive information.

Check out Create a credentials variable set for more information.

Terraform Workspaces

Terraform Workspaces are a way to manage multiple environments or configurations within a single Terraform configuration. A workspace allows you to isolate the state for different environments (development, staging, production) without needing to maintain separate configurations or directories for each one. Each workspace has its own separate state file, which Terraform uses to track resources for that specific workspace. By using workspaces, you can easily switch between different environments, manage infrastructure for multiple projects, or isolate different configurations, all while keeping the same codebase. The default workspace is called "default," but you can create and switch between custom workspaces as needed.

A VCS-driven workflow refers to using a Version Control System (VCS), such as Git, to manage and drive the process of deploying infrastructure and code changes.

In this workflow, all infrastructure code (like Terraform configurations, scripts, or configuration files) is stored and versioned in a VCS repository, enabling teams to collaborate, track changes, and review code before deployment.

For example, the process typically looks like this:

1. Code in a VCS (e.g., GitHub, GitLab): The infrastructure code (e.g., Terraform configuration files) is written and stored in a Git repository.

2. Pull Requests / Merge Requests: Developers submit changes through pull/merge requests, which undergo code reviews and testing.

3. CI/CD Pipeline: After approval, a Continuous Integration/Continuous Deployment (CI/CD) pipeline is triggered, pulling the latest changes from the VCS repository and applying the changes to the infrastructure (via tools like Terraform).

4. Automation: The CI/CD pipeline can automate running terraform plan, terraform apply, and even testing, ensuring that infrastructure updates are safely and consistently deployed.

This approach ensures collaboration, version control, and auditability for infrastructure, promoting best practices and reducing errors in production environments.

Check out Use VCS-driven workflow for more information.

Terraform Policies

Terraform policies are rules or guardrails that define what infrastructure changes are allowed or denied within your organization. They’re used to enforce compliance, security, and best practices across your Terraform deployments. Helping teams move fast without breaking things.

In HCP Terraform (Terraform Cloud), policies are typically written using Sentinel. A HashiCorp’s policy-as-code framework. With Sentinel, you can write custom policies that run before terraform apply, and decide whether a given plan complies with your organizational rules.

For example, you can write a policy that ensures:

1. No EC2 instances are launched without tags
2. Only certain regions are used
3. S3 buckets must have encryption enabled
4. Resources can't exceed certain cost thresholds

By using policies, you can enforce standards without slowing down developers, giving teams autonomy while maintaining centralized control and governance over your infrastructure.

Summary

Terraform has become the go-to tool for building and managing infrastructure because it brings the power of automation, consistency, and scalability to modern DevOps practices. By using infrastructure as code (IaC), Terraform allows teams to define infrastructure in version-controlled files, making it easy to track changes, collaborate across teams, and maintain predictable environments from development to production. It supports a vast ecosystem of providers, enabling multi-cloud and hybrid infrastructure management from a single codebase. With features like remote state management, policy enforcement, workspaces, and integrations with secret managers and CI/CD pipelines, Terraform helps organizations move faster, reduce human error, and stay compliant. That’s why companies of all sizes. From startups to enterprises, are relying on Terraform to streamline their infrastructure operations and support the rapid pace of modern software delivery.

Check out Terraform Language Documentation for more information.

Check out Learn Terraform recommended practices for more information.