In this article, we compare Terraform and Terraform Enterprise across five areas that typically matter most as usage grows: collaboration, state at scale, governance, operational reliability, and total cost of ownership.
What is Terraform?
Terraform is an infrastructure as code tool from HashiCorp. It lets you define and manage infrastructure, cloud resources, networking, and managed services, using declarative configuration files. You describe the desired end state, and Terraform plans and applies the changes needed to reach it.
Key features of Terraform:
- Declarative workflows: Describe what you want; Terraform creates a plan and applies it.
- Provider ecosystem: Manage resources across many platforms (AWS, Microsoft Azure, Google Cloud, Kubernetes, SaaS tools, and more).
- State management: Tracks real-world infrastructure to detect drift and apply incremental changes.
- Modules: Package reusable building blocks to standardize infrastructure across teams.
- Dependency graph and parallelism: Orders resources automatically and can run changes in parallel.
What is Terraform Enterprise?
Terraform Enterprise is HashiCorp’s self-hosted distribution of HCP Terraform (formerly Terraform Cloud). It’s designed for organizations that want the HCP Terraform workflow, but deployed inside their own environment for more control over security, networking, and data residency.
Terraform Enterprise is often described as a private instance of the same application as HCP Terraform, with enterprise-focused features like audit logging and SAML single sign-on (SSO), plus flexibility in how you deploy and operate it.
Key features of Terraform Enterprise:
- Self-hosted control: Run the platform in your own environment to meet stricter security and compliance requirements.
- Remote runs and centralized workflow: Standardize execution through a workspace-based run system with a shared UI and run history.
- Enterprise authentication and auditability: Support for SAML SSO and audit logs for traceability.
- Workspace-based collaboration model: Organize infrastructure into workspaces with consistent settings and access patterns.
- Automation interfaces: Manage and integrate Terraform Enterprise via APIs and supported tooling.
What are the main differences between Terraform and Terraform Enterprise?
Terraform is the CLI tool you run yourself, while Terraform Enterprise (TFE) is a self-hosted platform that centralizes how teams run and govern Terraform, with added enterprise features like audit logging and SAML SSO.
1. Workflow & collaboration
With Terraform, collaboration is mostly something you design around the CLI: developers run plans and applies locally or in CI, reviews happen in Git, and teams standardize conventions (branching, approvals, who can apply, and how credentials are handled). This can work well, but consistency depends on how reliably those practices are enforced across repositories and pipelines.
Terraform Enterprise moves more of that workflow into one system (workspace-based runs, shared run history and UI, and standardized triggers like VCS or API).
The practical difference is less about what Terraform can do and more about where execution and coordination live: distributed across many CI setups versus centralized in one platform.
2. State management at scale
State is Terraform’s coordination point — locking, drift detection, and safe concurrency depend on it. With Terraform, teams typically scale by choosing and operating a remote backend (storage, locking, encryption, access controls, backups, and recovery procedures). That approach can scale well, but reliability and guardrails come from your backend choices and operational discipline.
Terraform Enterprise includes remote state and locking as part of its workflow layer, alongside the run system that writes state. This can reduce custom plumbing (state conventions, locking patterns), but it also couples state and execution to a platform you must operate.
3. Governance & policy enforcement
If your governance model requires guardrails to be enforced consistently, the core difference is where enforcement happens.
With Terraform, many organizations rely on a mix of code review rules, CI checks, scanners, and external policy engines. You can enforce strong controls, but you often maintain multiple integrations and ensure every repository and pipeline stays aligned.
Terraform Enterprise provides integrated policy checks in the run workflow, with defined enforcement behavior. That can make enforcement more consistent across teams, but it doesn’t eliminate the need to design policies carefully, and it shifts some work from per-repository pipelines into platform configuration.
4. Operations, support, and reliability
Terraform is a tool. Reliability depends on where you run it (developer machines, CI runners) and how you manage credentials, secrets, logging, and upgrades. When something breaks, troubleshooting often spans Terraform configuration, CI logs, state/backend issues, and cloud provider behavior.
Terraform Enterprise gives you a dedicated system for runs and auditability, but it also adds platform operations responsibilities (upgrades, capacity planning, availability, and internal networking).
Some organizations prefer this trade-off because it centralizes execution and visibility. Others prefer keeping Terraform lightweight and investing in their existing CI and SRE practices.
5. Costs and total cost of ownership
Terraform is free to use, but it’s source-available under HashiCorp’s BSL (not OSI open source). Teams spend engineering time to standardize pipelines, secure credentials, manage remote state, implement policy checks, and build audit trails. Those costs are usually small early on and grow with the number of environments, repositories, and compliance requirements.
Terraform Enterprise adds licensing plus the cost of running the platform (infrastructure and admin time). The potential upside is reduced DIY effort for standardized workflows, centralized visibility, and built-in governance, but whether you realize that savings depends on what you already have in CI/platform engineering and how regulated or complex your Terraform usage is.
Why consider a Terraform Enterprise alternative?
Spacelift is an IaC management platform that helps you build end-to-end workflows for Terraform, OpenTofu, 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.
Table comparison
The table below shows the main differences between all three platforms:
| Feature | Spacelift (Cloud & self-hosted) | Terraform | Terraform Enterprise |
|---|---|---|---|
| Pricing model | Predictable pricing | Free (source-available under HashiCorp BSL) | License-based |
| Multi-IaC workflow | Yes—Terraform, OpenTofu, Terragrunt, CloudFormation, Kubernetes, Ansible, Pulumi | Terraform-only (others via external tooling) | Terraform-only |
| Dependencies workflow | Yes | External orchestration (CI/CD scripts and pipeline logic) | Yes (run triggers) |
| Integrations | Unlimited integrations | Via CI/CD tooling (webhooks, scripts, plugins) | Run Tasks plus integrations |
| Workflow control | Bring your own image, hooks in runner phases | Full control anywhere you can run the CLI | Platform-managed runs (self-hosted platform) |
| Policies | Policy as code across many decision points | External tools (OPA/Conftest, Checkov, tfsec, CI rules, custom code) | Sentinel or OPA (policy sets) |
| Policy templates | Import and modify templates | Tool-dependent (community examples) | Examples and templates available |
| Resource visibility | Inventory with visualization, lifecycle tracking, search, and filtering | No built-in inventory UI (state files plus cloud consoles/third-party tools) | Workspace resources + Explorer (cross-workspace/project visibility) |
| Reusable scopes | Auto-attachable contexts and policies via labels | Not built in (repository structure/CI conventions) | Policy sets and workspace scoping |
| Unlimited policies and tool integrations | Yes | Yes (effort/tooling-dependent) | Tier-based (varies by license) |
| Targeted runs | Native support | Native via -target | Via TF_CLI_ARGS_* |
| Atlantis-style workflow | Yes | Via Atlantis (external) | Partial |
| Custom tasks | Yes | Yes (CI/CD steps/scripts) | Yes (Run Tasks) |
| Scheduling | Advanced scheduling | No built-in (cron/CI schedulers/API) | No built-in cron (use external tooling) |
| State management | Managed, with option to use other backends | Multiple backends supported (self-managed) | Managed by Terraform Enterprise |
Key points
Terraform and Terraform Enterprise address the same core goal: managing infrastructure from code, but they split responsibilities differently. With Terraform, you own more of the workflow “platform” through CI/CD and conventions. With Terraform Enterprise, more workflow and governance moves into a centralized system, with licensing and platform operations overhead.
In practice, the best fit depends on your scale, compliance requirements, and how much you want to build versus buy around Terraform. It can also be worth evaluating platforms that standardize Terraform workflows without requiring Terraform Enterprise — especially if you want multi-IaC orchestration and policy guardrails across more than Terraform runs.