Will a New ‘OpenTofu’ Brand Win Enterprise Buyers Away from Hashicorp and Terraform?

Will a New ‘OpenTofu’ Brand Win Enterprise Buyers Away from Hashicorp and Terraform?
Organic Raw Soy Tofu on a Background

There is a new name in Infrastructure-as-Code. Formerly known as OpenTF, the newly minted Open-Source fork of Terraform – initiated and supported by Scalr, Harness, Spacelift, env0, and Gruntwork in response to Hashicorp’s decision to switch its licensing model to BSL – will now be called OpenTofu.

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New Fork, Who Dis?

OpenTF did not yet have significant awareness or recognition, so the timing makes sense. It appears necessary (according to a discussion in the open repository for the project) to avoid commercial,  legal, or other conflicts with Hashicorp and Terraform. Many in that forum talked about a new name that is fun, clever, recognizable, charming, different, and memorable – all admirable brand attributes.

No doubt ‘OpenTofu’ fits this brief. It joins a pantheon of food-related software – not just the obvious successful brands like Apple, but also Android releases (Gingerbread, Lollipop, KitKat, Marshmallow, etc.); storied brands like Blackberry, Apricot, and Java; and beloved terms like cookie, spam, or phish.

Branding Matters – And I Should Know!

However, a ‘fun’ product name is not always good in the stuffy world of enterprise software. Quirky product names and brands become increasingly problematic as a business grows from selling standalone products to individual buyers at departmental level using personal relationships, to closing enterprise-scale deals through opex committees in scaled commercial sales operations.

Fun names might work in startups, B2C, or self-service, but enterprise Chief Financial Officers (CFOs) are quick to question purchase orders for unfamiliar brands; even to delay, jeopardize, and in some cases kill substantial deals. Portfolio budget owners with MBAs or ITIL certs will hesitate to sign a 6- or 7-figure check to what sounds like a trendy food product operating out of a Brooklyn-based commissary.

Believe me – I have personally spent countless millions on brand awareness campaigns, and led multi-million-dollar rebranding projects, primarily to ensure budget owners (especially outside tech teams) recognize my brand name when our PO hits their desk. Most came from a data-driven commercial need to drop the ‘pet’ names based on the Founder’s spouse, children, pets, car, food, or travel destination. Most changes were demanded by my CRO as a sales imperative, not my CMO as a marketing initiative.

What’s in a Name?

Serious technologists often mock branding as ‘just marketing’ – probably no greater pejorative for a ‘true’ technologist! But words matter. Impressions matter. Branding matters. Like that one time when my team keenly settled on a new tagline of ‘Assure, Simplify, Secure’ – until I pointed out the acronym.

This may be a conscious effort to eschew stuffy ‘enterprise-grade’ seriousness, and instead market to a more approachable and attainable SMB or departmental buying center. Sageable certainly expects the best opportunity for OpenTofu to gain initial traction is by targeting individual contributors, especially advocates and ‘influencers’ in smaller organizations or departments, rather than enterprise CTOs and CIOs. This GTM motion has proven successful in the past for both open-source and for-profit businesses. However, it also becomes a significant challenge when the time comes (as it hopefully does) to ‘sell higher’, expand beyond departmental buyers and free users, gain new customers, and grow deal sizes.

Does ‘Enterprise-Grade’ Seriousness Really Matter?

This choice makes me wonder if OpenTofu has the enterprise chops it will need to be successful. Here it seems to be catering to a friendly audience of open-source contributors, rather than a more skeptical audience of commercial enterprise buyers. This would be great news for Hashicorp & Terraform, but less so for any enterprise CTO looking to convince their CFO & COO to free up budget for an alternative.

But maybe branding doesn’t matter anymore. We know that ‘goofy’ brands absolutely can be successful. Certainly, buyers are increasingly passing over stuffy traditional names like “International Business Machines” to send billions of dollars to improbably-named brands like “Google” or “Splunk”.

At Sageable, I am therefore advising clients to wait for material impact (new feature release, customer adoption, competitive wins, sustained MAUs, accelerated ARR, etc.) before passing judgment. After all, OpenTofu is still only a brand – no code is yet available to download. And anything can happen in tech.

Only time will tell whether OpenTofu can prove its value in the highly competitive enterprise market.