Terraform Cloud (HCP Terraform) vs. Terraform Enterprise

Terraform Cloud, now known as HCP Terraform, is HashiCorp’s managed platform for running and collaborating on Terraform workflows. It provides a centralized environment where teams can securely manage infrastructure as code, automate provisioning, and enforce policies without maintaining their own Terraform execution infrastructure.

Key features of Terraform Cloud:

• Remote state management: Stores and shares Terraform state files securely, ensuring consistent deployments across teams and environments
• VCS Integration: Connects to GitHub, GitLab, Bitbucket, and others, automatically triggering Terraform runs on code changes
• Collaboration and governance: Includes team-based permissions, run approvals, and policy enforcement for safer and more consistent infrastructure operations
• Supports Run Tasks, Sentinel/OPA policy sets, and run triggers between workspaces

Terraform Enterprise (TFE) is HashiCorp’s self-managed commercial version of Terraform, built for teams that need advanced security, governance, and scalability. It extends the Terraform CLI with a centralized, enterprise-grade platform for managing infrastructure as code across multiple environments.

Key features of Terraform Enterprise:

1. Workspace management: Organizes and automates Terraform runs, securely handling variables and multiple environments
2. Policy as code: Automatically enforces compliance and security rules before changes are applied
3. Private module registry: Enables internal sharing and versioning of Terraform modules for consistent deployments

Terraform Cloud is a SaaS solution managed by HashiCorp, while Terraform Enterprise is self-managed and operated within your own infrastructure. Both execute Terraform, but the choice depends on who operates the platform.

Let’s see the comparison in more detail:

1. Deployment model

Terraform Cloud and Terraform Enterprise differ mainly in how they are deployed.

Terraform Cloud is fully hosted by HashiCorp within the HashiCorp Cloud Platform (HCP). It removes the need for infrastructure management, making it ideal for teams that prefer a managed service with minimal operational overhead.

Terraform Enterprise, by contrast, is deployed and maintained by the organization, either on-premises or in a private cloud. This setup requires more internal resources but offers complete control over networking, data residency, and integrations.

2. Maintenance

Terraform Cloud requires no customer maintenance, while Terraform Enterprise involves full operational responsibility.

For example, in TFE, upgrading to a new Terraform version or handling internal certificate rotation is the customer’s task. In TFC, these are handled automatically by the platform. 

Common TFE deployments also manage external PostgreSQL and S3-compatible object storage.

3. Networking control

Terraform Enterprise allows full network customization, while Terraform Cloud offers minimal control but simplified setup.

Terraform Cloud runs in HashiCorp’s managed environment, with no access to underlying infrastructure, IP configuration, or VPC-level controls. All networking to external resources (for example, cloud providers or private APIs) must be enabled through features like Agents (self-hosted runners) or published IP ranges for VCS/notifications, which offer limited customization.

TFE is installed in a self-managed environment, allowing full control over network topology. Organizations can configure VPCs, subnets, firewalls, and routing, ensuring that all Terraform runs happen within a secure perimeter. TFE can also directly access internal systems without needing external ingress or specific allowlisting.

4. Scalability

TFC is a managed service that auto-scales based on usage patterns, handling workload spikes without user intervention. It runs in a highly available, multi-tenant architecture with native support for global deployments through HashiCorp’s infrastructure (HCP). This reduces operational overhead and simplifies scaling across regions.

In contrast, TFE is a self-hosted solution where organizations are responsible for provisioning compute resources, configuring horizontal scaling (for example, via worker replicas), and deploying HA components like load balancers or PostgreSQL clustering. This provides more control but adds operational complexity and scaling limitations based on the underlying infrastructure.

For organizations with limited ops resources or fluctuating workloads, TFC provides simpler, elastic scalability. TFE is better suited for environments with strict control or regulatory needs, but requires more infrastructure management to scale effectively.

5. Upgrades

In TFC, new features, security patches, and integrations are rolled out automatically by HashiCorp without user intervention. This ensures users always have access to the latest capabilities, such as policy set enhancements or cost estimation updates, without downtime or upgrade planning.

In contrast, TFE upgrades must be scheduled, tested, and applied manually. This provides more control over versioning, which is important for organizations with strict change management policies, but it introduces operational overhead and the risk of falling behind on important updates.

6. Pricing

Terraform Cloud uses a subscription-based pricing model where the main meter is Resources Under Management (RUM), with tiers like Free/Standard/Plus and limits (e.g., Free: 1 policy set up to 5 policies, and concurrency limits vary by tier).

Terraform Enterprise typically involves a license-based model with higher upfront and operational costs, as it is self-hosted and maintained by the customer. Pricing also reflects support levels, infrastructure requirements, and enterprise-grade features, such as private networking and advanced access controls.

The main pricing difference lies in who manages the platform and how costs are bundled — Terraform Cloud bundles hosting and maintenance into its pricing, while Terraform Enterprise shifts these responsibilities to the customer.

Spacelift is an IaC management platform that helps you build end-to-end workflows for Terraform, OpenTofu, any custom Terraform binary, Terragrunt, Pulumi, CloudFormation, Ansible, and Kubernetes. 

With Spacelift, you can integrate with any tool you want, bring your own image, and control what happens before and after all runner phases, making it the most flexible IaC management platform available.

Apart from that, Spacelift’s policies can be leveraged for much more than plan and approval levels. With these policies, you can also control access, set up the behavior a stack should have when a pull request is open or merged, control where to send notifications and where to see metric details, trigger other stacks, and more.

Spacelift also offers a mechanism to create dependencies between stacks, giving you the flexibility of sharing outputs between them, regardless of whether you are using a multi-IaC or single IaC workflow — if the IaC tool supports outputs, you can easily share them.

You can also build self-service infrastructure using Spacelift’s Blueprints, which can be really helpful, especially for development teams that need to build infrastructure but don’t want to touch any IaC.

Spacelift gives you far more than Terraform Cloud or Terraform Enterprise, at a fraction of the cost. Spacelift’s pricing is predictable and there is no RUM, so it will be easy to predict what your bill will look like at the end of the month. 

See the comparison here: Terraform Cloud vs. Spacelift and here: Terraform Enterprise vs. Spacelift.

The table below shows the main differences between all three platforms:

It’s very easy to migrate from Terraform Cloud to Spacelift. Spacelift developed a way to speed up the migration process. Learn how to migrate from Terraform Cloud.

Terraform Cloud and Terraform Enterprise share the same foundation but suit different needs — SaaS agility vs. self-managed control. For even more flexibility, automation, and CI/CD integration, explore Spacelift as a flexible alternative to Terraform Cloud and Enterprise.