Infrastructure as Code (IaC) has emerged as the preferred method for managing infrastructure, particularly among developers working with cloud environments. IaC allows you to automate the setup of your entire cloud environment using code, giving you complete control over your infrastructure and making it easier to fix issues by simply reviewing and updating the code.

When it comes to IaC tools, two major players dominate the scene: AWS CloudFormation and Terraform by HashiCorp. Both tools are widely used by organizations worldwide, but here’s the question many of you may have: Why use a third-party tool like Terraform when AWS already provides CloudFormation that mostly does the same thing?

Let’s break it down in detail by comparing Terraform vs CloudFormation.

What is Terraform?

Terraform, developed by HashiCorp, is an open-source Infrastructure as Code (IaC) tool that enables developers to define, manage and automate infrastructure using code. It uses a language called HashiCorp Configuration Language (HCL), which allows users to describe their infrastructure in a simple, human-readable format.

One of its standout features is its cloud-agnostic ability, which allows it to work across multiple cloud providers, including AWS, Azure, Google Cloud, and even on-premise environments. This versatility makes Terraform ideal for organizations operating in hybrid or multi-cloud environments. Using a declarative configuration language called HashiCorp Configuration Language (HCL), Terraform allows users to describe their infrastructure in human-readable templates, which can then be executed to automate resource creation, modification, or deletion. Also, Terraform’s cloud-agnostic nature makes it the better option for managing resources across AWS, Azure, Google Cloud, and more—all from a single tool, including tasks like Terraform EC2 instance deployment.

What is AWS CloudFormation?

AWS CloudFormation is Amazon’s native IaC tool, designed to automate the provisioning, management, and updating of AWS resources. Built specifically for the AWS ecosystem, CloudFormation allows users to define their infrastructure using JSON or YAML templates, which are then executed to deploy and manage AWS services. CloudFormation takes full advantage of AWS’s deep integrations, offering seamless control over all aspects of the AWS cloud, from computing and storage to networking and security.

Terraform vs CloudFormation: What to Choose?

When deciding between Terraform vs CloudFormation, it's crucial to assess your organization’s specific infrastructure needs, the level of flexibility you require, and whether you plan to stick with AWS or venture into multi-cloud environments. Both tools have their strengths, but let’s have a look at some key factors to consider:

1. Language Flexibility
Terraform uses HCL, which strikes a balance between being readable for humans and workable for machines. It’s designed to be simple yet powerful, with rich features like string interpolations, built-in functions, conditionals, and (soon) loops. You can write more complex logic in Terraform without a full-blown programming language.

CloudFormation, on the other hand, uses JSON or YAML. While YAML is easier to read than JSON, it can still get messy when dealing with deeply nested structures. Terraform’s clean syntax and formatting rules make managing it easier, especially for complex infrastructures.

2. Code Reusability
With Terraform, you can create modules, which are reusable pieces of code that can be shared across multiple projects. Terraform module best practices make it easy to structure your code in a way that makes sense for your team. These modules can be stored on GitHub or in the public Terraform Module Registry, allowing for easy version control.

In contrast, CloudFormation supports nested stacks, but this approach can get cumbersome. You often end up with massive files that are hard to manage and navigate, while Terraform allows you to break down infrastructure code into smaller, easier-to-handle modules.

3. Multi-Cloud Support
The biggest reason many developers still choose Terraform over CloudFormation is its multi-cloud support. CloudFormation is built specifically for AWS, so it’s a great fit if you’re working exclusively within the AWS ecosystem. But if your organization uses multiple cloud platforms, Terraform’s cloud-agnostic nature makes it the better option. You can manage resources across AWS, Azure, Google Cloud, and more—all from a single tool.

Why Terraform Stands Out

While CloudFormation is a strong choice for those focused solely on AWS, in the Terraform vs CloudFormation debate, Terraform often emerges as the superior option. Its flexibility to work across multiple cloud platforms, easy-to-read configuration language, and modular approach make it a standout choice for organizations with diverse needs.

Terraform is likely the way to go if you want to streamline your infrastructure management across various cloud environments and want a tool that scales with your needs. To make the most of Terraform’s capabilities, you should hire Terraform developers. They can help you set up, manage, and optimize your infrastructure, ensuring you get the best results from your IaC strategy.