How Open Source IaC Tools Save Costs vs Proprietary

Open source Infrastructure as Code (IaC) tools can help businesses save money by eliminating licensing fees, reducing cloud costs, and avoiding vendor lock-in. While proprietary tools offer convenience and support, they often come with high recurring costs and restrictions that can grow as your infrastructure scales.

Key highlights:

• Open source tools like Crossplane and OpenTofu are free to use, with no licensing or subscription fees.
• Proprietary tools, such as Terraform Enterprise, can cost upwards of £12,000 annually, with additional costs based on usage.
• Open source solutions support multi-cloud setups and avoid vendor lock-in, making them more flexible for long-term use.
• Hidden costs of open source tools include training, maintenance, and hosting infrastructure, but these can be offset with skilled DevOps teams.
• Proprietary tools are better suited for organisations with strict compliance needs or limited internal expertise.

Quick Comparison:

Bottom line: Open source IaC tools are ideal for cutting costs and maintaining flexibility, while proprietary tools work best for organisations needing more support and security features.

The IaC Evolution - on Open Source & Everything Else

Direct Costs: Open Source vs Proprietary IaC Tools

When comparing open source and proprietary Infrastructure as Code (IaC) tools, one of the most noticeable differences lies in their direct costs. Open source tools are free to use, while proprietary options often come with subscription fees or pay-per-resource pricing, which can escalate as your usage grows. Tools like Terraform Open Source, Crossplane, and Pulumi Open Source are completely free - there are no licence fees, subscription costs, or imposed usage limits. This makes them highly attractive for teams looking to keep initial costs low.

On the other hand, proprietary tools operate on pricing models such as subscriptions, per-user fees, or consumption-based charges. As your infrastructure expands, these costs can increase significantly, creating a notable gap in expenses between the two approaches.

Licensing and Subscription Fees

Open source IaC tools typically operate under permissive licences, which means there are no usage fees. For example, Crossplane is a fully open-source project under the Cloud Native Computing Foundation (CNCF) umbrella [4]. Similarly, OpenTofu is an open-source alternative that emerged following recent changes to Terraform's licensing structure.

In contrast, proprietary tools rely on subscription or consumption-based pricing. For instance:

• Terraform Cloud has adopted a Resources Under Management (RUM) model, charging approximately £0.00011 per hour per resource after the first 500 free resources each month [4]. For larger deployments, Terraform Enterprise costs around £30,000 annually, with entry-level pricing starting at £12,000 per year [4].
• Pulumi's paid tier starts at £0.80 for 2,000 credits, while Puppet charges £112 per year for its basic subscription [6].
• Ansible's enterprise version is priced at £8,000 annually for 100 nodes [6].

One challenge with proprietary tools is the unpredictability of consumption-based pricing. As your infrastructure scales, costs rise proportionally, which can lead to unexpected expenses if resource usage isn't closely monitored.

Cost Comparison Table

The table below provides a clearer picture of how these pricing models affect costs as infrastructure scales:

This comparison underscores the differences in scalability costs. Open source tools remain free regardless of team size or infrastructure complexity, making them an attractive option for long-term cost management. Proprietary tools, however, introduce recurring costs that grow alongside your usage. For example, AWS CloudFormation and Azure Resource Manager don’t charge for the tools themselves but link costs directly to the underlying cloud resources. While this can be economical for small deployments, it may become expensive as your infrastructure scales.

Additionally, some managed open source services, such as Upbound for Crossplane, offer a hybrid approach. These services provide enterprise-grade features and support while avoiding full proprietary lock-in. However, they do introduce subscription costs not present in purely open source solutions [4].

Hidden Costs: Infrastructure, Expertise, and Maintenance

Open source Infrastructure as Code (IaC) tools may save you money on licensing fees, but they come with hidden costs that businesses often miss during initial planning. These costs can quickly add up, so it’s crucial to account for them early to avoid unexpected budget issues.

Infrastructure Hosting and Tooling

While open source tools don’t charge licence fees, they shift operational responsibilities - and their associated costs - onto your business. You’ll need to manage your own infrastructure, which includes hosting state files, maintaining CI/CD pipelines, and running additional services that proprietary tools often include in their subscriptions.

Take state file storage, for example. You might use cloud options like Amazon S3 or Azure Blob Storage, which charge per gigabyte per month. On top of that, there are fees for API calls, data transfers, and encryption. These costs might seem small at first, but they can grow significantly as your infrastructure scales.

CI/CD pipelines are another expense to consider. Whether you use GitHub Actions, GitLab CI, or self-hosted runners, you’ll face deployment compute charges. Self-hosted runners require dedicated virtual machines, while managed services bill based on the compute time you use. For teams with frequent deployments, these costs can escalate quickly.

You’ll also need tools for secrets management, monitoring, and backups - services that are essential for production environments but aren’t bundled with open source tools. Proprietary solutions, on the other hand, often include these features in their pricing. For example, Terraform Cloud provides hosted state backends, integrated CI/CD, and secrets management, offering more predictable costs and lower operational overhead.

Expertise and Training

Another hidden cost is the need for skilled personnel. Open source IaC tools require experienced DevOps professionals who not only understand the tools but also have a deep knowledge of infrastructure, security, and integrations. In the UK, DevOps engineers earn between £45,000 and £80,000 annually, with senior roles commanding even higher salaries.

Training your existing team adds further costs. Open source tools often rely on community documentation and online tutorials, which can be time-consuming and require self-directed learning. This extended training period can reduce overall productivity.

Proprietary solutions, by contrast, often include structured onboarding, certifications, and dedicated support as part of their subscription fees. They provide official training materials, workshops, and direct access to experts, helping teams get up to speed faster - though this convenience comes at a higher recurring cost.

Ongoing Maintenance

Maintenance is another area where costs can sneak up on you. Open source tools require your team to handle security patches, version updates, and compatibility issues with cloud providers. Without dedicated vendor support, you’ll often rely on community forums or internal troubleshooting, which can lead to longer resolution times.

Your developers spend too much time on infrastructure instead of building features that drive business value. – Hokstad Consulting [1]

For smaller teams, this issue is even more pressing. Developers often have to split their time between managing infrastructure and working on core product development. This balancing act can lead to lost productivity and missed opportunities to focus on what drives your business forward.

Working with experts like Hokstad Consulting can help reduce these hidden costs. They offer services such as DevOps transformation, cloud cost engineering, and custom automation solutions. By streamlining infrastructure management and ensuring compliance with UK regulations, they allow teams to enjoy the flexibility of open source tools without the headaches of complex implementations.

When comparing open source and proprietary IaC tools, it’s important to account for these hidden costs. While open source tools eliminate licensing fees, they shift the responsibility for infrastructure, expertise, and maintenance onto your organisation. Proper planning can help you avoid surprises and make the best choice for your business.

Running Costs: Scaling, Support, and Updates

After examining hidden infrastructure and expertise costs, it's clear that ongoing expenses play a key role in differentiating open source tools from proprietary solutions. As your infrastructure grows, these differences can have a noticeable impact on your budget and operational efficiency.

Scaling Costs and Growth Considerations

Open source Infrastructure as Code (IaC) tools, such as Crossplane and OpenTofu, stand out because they don’t charge licence fees, even as you scale. Whether you're managing a modest 100 resources or an extensive 10,000, the tools themselves remain free to use. The only costs you’ll encounter are tied to your infrastructure and the effort required to manage it.

On the other hand, proprietary tools often come with pricing models that increase as your resource usage grows. This can lead to rapidly rising costs during periods of expansion, making it harder to predict and control budgets when scaling up.

Open source tools also offer notable efficiency when it comes to scaling. For example, Crossplane’s updated architecture has shown measurable benefits, such as faster resource provisioning and reduced memory and CPU usage [4]. These improvements can help cut operational costs as your business expands. However, UK organisations should also consider external factors like currency exchange rates and VAT, which could influence overall expenses. These scaling factors naturally lead to the next major consideration: support and maintenance costs.

Support and Maintenance Expenses

Scaling aside, support and maintenance are critical components of the total cost of ownership. Open source tools rely on community-based support, which is free but comes with variable response times. Forums and documentation are valuable resources, but they may not meet the needs of time-sensitive or mission-critical environments.

Proprietary tools, on the other hand, offer structured support plans. Business-tier plans typically cost between £30 and £60 per user per month, while enterprise-level plans range from £70 to £150 per user per month [2]. These plans often include benefits like dedicated account managers, priority support queues, and guaranteed response times - features that can be essential for organisations where downtime is not an option.

When it comes to updates, proprietary tools bundle security patches and updates into their service offerings, simplifying maintenance and reducing technical overhead. Open source tools, while also receiving regular updates, require internal expertise to test and implement these updates safely [4]. This self-managed approach can be resource-intensive, particularly for teams lacking in-house DevOps specialists.

For organisations without a dedicated DevOps team, the hidden costs of open source tools can add up quickly. Hiring consultants or investing in staff training might be necessary to fill the gaps. Services like Hokstad Consulting, which specialise in optimising DevOps workflows and cloud infrastructure, can help bridge the divide between the cost-efficiency of open source tools and the robust support offered by proprietary solutions.

Ultimately, the decision between community-driven and vendor-backed support comes down to your team’s expertise and your organisation’s tolerance for risk. Smaller teams with limited DevOps skills may prefer the predictability and convenience of proprietary support, while experienced teams might find open source tools sufficient, supplemented by occasional consulting when needed.

Vendor Lock-in and Long-Term Flexibility

Vendor lock-in can become a significant financial burden when relying on proprietary Infrastructure as Code (IaC) tools. Essentially, it happens when a business becomes so dependent on a specific tool that switching to an alternative becomes both expensive and complex. For UK organisations, factors like VAT and currency fluctuations can make these costs even more daunting, emphasising the importance of maintaining strategic flexibility over the long term.

Migration Costs and Multi-Cloud Approaches

The financial strain of vendor lock-in is most noticeable during migration. Moving away from a proprietary tool often requires rewriting infrastructure code, retraining staff, and managing potential downtime. Depending on the complexity of your infrastructure, these costs can climb into the tens or even hundreds of thousands of pounds [4].

For example, Deutsche Bank transitioned from Terraform to OpenTofu in 2023 after Terraform’s licensing changes, aiming to maintain flexibility and avoid being tied to a single vendor [3]. Similarly, GitHub’s infrastructure team also supported OpenTofu after these changes, ensuring they could continue benefiting from open-source flexibility without being restricted by a vendor’s roadmap [3].

Open source IaC tools like Crossplane and OpenTofu are designed to work seamlessly across multiple cloud platforms without additional licensing fees or restrictions [3][4]. This makes them particularly appealing for UK organisations aiming to adopt a multi-cloud strategy. By choosing the best services from different providers, businesses can optimise costs, improve performance, and meet compliance requirements. Additionally, these tools help avoid premium charges for cross-cloud support and minimise the risk of being locked into a single vendor’s pricing structure.

On the other hand, proprietary tools often rely on unique configuration languages or APIs, making migration to alternative platforms more challenging and costly [5]. For instance, Terraform Enterprise comes with an annual price tag of approximately £29,000 (around $37,000), not including the potential migration costs if switching becomes necessary [4]. Furthermore, Terraform Cloud’s Resources Under Management (RUM) pricing model complicates cost forecasting and can lead to higher expenses as your infrastructure grows [4].

Flexibility with Open Standards

Open source IaC tools provide greater long-term flexibility by adhering to open standards and fostering community-driven development. These tools are generally compatible with a variety of platforms and services, enabling UK businesses to switch providers, integrate new technologies, and automate workflows without incurring extra costs for proprietary connectors or custom solutions [4].

Terraform’s shift from an open-source licence to the Business Source License (BSL) in late 2023 led to the creation of OpenTofu, a community-driven fork that underscores the significance of open governance for maintaining flexibility [3]. When licensing becomes restrictive, the open-source community often steps in with alternatives, ensuring continuity and avoiding lock-in.

Community-driven development also brings frequent updates, new features, and stronger security, reducing the need for expensive vendor support contracts. UK businesses can benefit from innovations contributed by a global community at little to no additional cost [3][4].

Beyond the obvious migration expenses, UK organisations should also consider hidden costs. These include limited access to new cloud features, slower adoption of best practices, and increased reliance on vendor-specific support contracts. These factors can lead to higher operational costs, missed optimisation opportunities, and reduced bargaining power with cloud providers.

For businesses looking to balance flexibility and cost management, services like Hokstad Consulting offer tailored solutions. They specialise in assessing vendor lock-in risks, designing migration strategies for open-source IaC tools, and implementing automation solutions suited to the UK market and regulatory landscape.

The best way to avoid costly vendor lock-in is to prioritise tools that support open standards, maintain infrastructure code in portable formats, and invest in training staff on widely-used open-source solutions. This approach not only reduces immediate costs but also ensures agility to adapt to evolving business needs and technological advancements without incurring prohibitive switching costs.

Cost Savings Examples with Open Source IaC Tools

Here are some examples that highlight how businesses of different sizes have achieved tangible savings by using open source Infrastructure as Code (IaC) tools. These cases demonstrate how such tools can significantly reduce costs while enabling companies to reallocate resources effectively.

Startup Example: Small Teams with Limited Budgets

A London-based fintech startup with a team of eight engineers switched to using open source Terraform. This move cut their provisioning costs by 30% within the first year[6]. By eliminating a hefty £29,000 annual licensing fee, they redirected those funds toward optimising cloud resources and providing staff training.

This cost-saving initiative allowed the startup to reinvest in product development and improve its technical capabilities, paving the way for its growth. It's an approach that even larger organisations could take inspiration from.

Growing Company: Mid-Sized Teams with Growth Plans

A Manchester-based e-commerce company with 75 engineers adopted Crossplane and Ansible to implement a multi-cloud strategy. Over three years, they saved more than £120,000 by avoiding proprietary IaC licensing fees. These savings were reinvested into automation and enhancing their DevOps capabilities. The company also worked with consultancies like Hokstad Consulting to optimise their cloud costs further.

This example highlights how mid-sized companies can achieve substantial savings while improving efficiency and scalability.

Large Company: Teams with Complex Compliance Needs

A prominent UK financial services firm with over 500 engineers transitioned to open source IaC tools to meet strict regulatory requirements. By customising these tools to suit their complex compliance needs, the company avoided the steep costs of proprietary solutions. For organisations of this size, annual licensing fees for proprietary tools can exceed £100,000 - amounting to over £300,000 across three years. Open source alternatives, on the other hand, incur minimal direct costs while offering the flexibility needed to tailor solutions for regulatory compliance[4][6].

These examples clearly demonstrate how eliminating licensing fees can free up budgets for strategic initiatives and operational improvements. Open source IaC tools not only reduce expenses but also provide the flexibility to support growth and innovation.

When Proprietary IaC Tools Make Sense

Open source IaC tools can be appealing due to their cost advantages, but there are situations where proprietary solutions are worth the investment. These tools often provide advanced features, enhanced security, and dedicated support that can outweigh the extra expense. Let’s explore how compliance requirements and limited internal expertise can make proprietary tools the better choice.

High Compliance and Security Requirements

Industries like financial services, healthcare, and government operate under strict regulations such as GDPR, HIPAA, and PCI-DSS. For these sectors, proprietary IaC tools are often the go-to option because they deliver advanced security features and detailed audit trails. These tools typically include centralised credential management, role-based access control, and strong encryption to protect sensitive data and secure infrastructure changes. For instance, some large organisations use Terraform Enterprise to secure their multi-cloud environments effectively[3].

When weighing costs, the licensing fees for proprietary tools can be a small price to pay compared to the potential fines and reputational damage that come with non-compliance. Beyond regulatory concerns, another factor often driving businesses toward proprietary solutions is the lack of in-house expertise.

Limited DevOps Expertise

For companies with limited DevOps skills, proprietary tools with vendor-managed services can be a game-changer. These solutions often come with extensive support and managed infrastructure, making it easier for teams with less experience to adopt IaC practices while they build their capabilities. For example, Terraform Cloud provides a managed experience with features like automated workflows and real-time validation[4].

For organisations that lack the resources to hire seasoned DevOps engineers, this approach can be more cost-effective in the long run. It allows internal teams to focus on core business priorities instead of getting bogged down in the complexities of infrastructure management. Over time, this investment in proprietary tools can help reduce downtime and speed up the delivery of value.

Specialist consultancies like Hokstad Consulting, which focus on DevOps transformation and cloud cost optimisation, can guide businesses in deciding whether to invest in proprietary tools or develop the capabilities to make open source solutions work for them.

Conclusion: Choosing the Right IaC Tool for Cost Efficiency

Selecting the ideal Infrastructure as Code (IaC) tool requires balancing immediate cost savings with long-term organisational needs. Open-source options, such as Crossplane, stand out for their lack of licensing fees and flexibility. On the other hand, proprietary tools often come with added benefits like enhanced security features and managed services, though they come at a higher price.

When considering costs, it’s vital to look beyond just the upfront expenses. Real-world examples illustrate how automation can streamline operations, boost efficiency, and minimise errors [3]. However, the total cost of ownership also includes factors like infrastructure hosting, training, and ongoing maintenance.

For smaller teams and startups, open-source tools can be particularly appealing. They allow businesses to tap into community support while building their DevOps capabilities without straining their budgets. Over time, these tools can offer additional savings by enabling multi-cloud strategies and simplifying migrations, reducing the risks and costs associated with vendor lock-in. Open standards also help ensure long-term flexibility, which can be a significant advantage when navigating the evolving pricing models, such as RUM-based approaches [4].

Ultimately, the best choice isn’t a simple either-or decision. Organisations need to assess their unique circumstances - team size, compliance requirements, budget limitations, and growth projections - to find the most cost-effective solution. Expert advice can be invaluable in this process. For instance, consultancies like Hokstad Consulting specialise in helping businesses cut infrastructure costs by 30–50% through strategic IaC implementation and cloud cost engineering, ensuring both savings and operational efficiency.

In many cases, starting with open-source tools and scaling up as needs evolve proves to be the most practical and cost-efficient strategy. The focus should always remain on delivering value to the business, rather than simply reducing upfront expenses.

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