CloudFormation vs. Terraform: Which IaC to Choose for Your Business?

CloudFormation vs. Terraform: Which IaC to Choose for Your Business?

IaC – Infrastructure-as-a-code is mainstream in the world of technology or cloud computing specifically. Cloud enthusiasts to IT businesses are all debating on CloudFormation and Terraform.

Even in the market, the competition between the two is cutthroat. As a matter of fact, ‘the market share of CloudFormation as of September 2022 is 25.34%’, mentions Slintel in a report. Further, it has a massive consumer base of 9804, of which 52.35% comes from the US.

CloudFormation Consumer Base by Geography

Surpassing CloudFormation, ‘Terraform secures a market share of 26.66% for the same duration.’ Its consumer base exceeds that of CloudFormation to 27,676, of which 43.49% comes from the US. We can rightly say that both the tools are well in-demand in the US cloud & infrastructure market.

Terraform Consumer Base by Geography

The main reason behind this demand is that both the IaC technologies help you shape and manage your cloud infrastructure with various tools. You specify how you want your infrastructure to appear, and the tool “applies” that by adding, removing, or changing cloud resources on your behalf.

However, there are significant differences between the two, and we ought to look into each to truly understand their best implementation.

But first, let us define them.


CloudFormation is an excellent solution by Amazon that allows the DevOps teams to effortlessly automate AWS infrastructure provisioning. With this managed AWS solution, you can design and provide AWS Consulting Services and outside resources for your cloud architecture. Cloudformation uses a JSON file called a template to manage configuration. Such templates give the user the flexibility to construct scalable and reusable infrastructure. YAML is a format that you can also use for Cloudformation templates.


Terraform by Hashicorp is a sophisticated open-source application that supports staff members working in IT operations to provide, improve, and maintain infrastructure. The Hashicorp Configuration Language is the domain-specific language used by Terraform. It is entirely JSON compatible and aids DevOps experts in defining infrastructure-as-code.

CloudFormation vs. Terraform

#1 Cloud support

As mentioned earlier, CloudFormation is a product of Amazon exclusively. On the other hand, Terraform is compatible with different cloud platforms. You can use CloudFormation for free if you own an AWS cloud plan, but for any other clouds, you need Terraform.

#2 Human intervention

Software as a service is what CloudFormation offers to you. Running it or maintaining its database’s state files are not issues you need to be concerned with. Your configuration files are sent to the service for use by the CLI tools, which then deliver the results.

When using Terraform, you run it on a machine, and you have to think about the state of file storage, shareability, and authorization to prevent two individuals from trying to alter it simultaneously. It still requires human setup, even if you save it remotely and use locks to make sure only one person has access to it at once.

However, it also offers the Terraform Enterprise service that is pretty identical to CloudFormation, such that you can transfer and run files on their API and have them send you back the results.

#3 Ease of use

It would be best if you acknowledged that Terraform initially is considerably simpler to use. It has an excellent CLI. However, running CloudFormation and its many tools is a little trickier.

If you want to construct or update a stack of resources, you must run a distinct command with the default CloudFormation tool, which is cumbersome. Its many tools eliminate this inconvenience, but they add a new layer you must understand and configure before you can build your initial stack.

#4 The programming language

The key benefit of using CloudFormation for big projects is that there are tools that help you specify your resources in a suitable programming language (Stacker – based on Python, and StackMaster – based on Ruby) and then generate CloudFormation that you use to create your resources.

As a sophisticated configuration file language, Terraform lacks these features, and its shortcomings become clear when attempting to abstract your code to eliminate exact repetition.

#5 Modularity

AWS Lambda functions are called for each action in a CloudFormation template so that you may model any behavior as a resource. CloudFormation also includes built-in programmability. You can create custom resources that can be added or deleted just like regular resources.

Of course, modules exist, but you have to pass every single piece of information into them when you call them. It is often simpler to copy-paste a resource than it is to have to send all the bits of information to it via a module.

#6 Recovery

If a resource in a “stack” in CloudFormation fails to create, update, or remove, the other resources will be restored to their previous states. Terraform requires you to fix your infrastructure when it leaves things broken. When you rerun it, it will continue where you left off. You could be left in a bind as a result of this.

Cloud Providers SupportExclusive for AWSSupports 20+ other clouds (Inc. AWS, GCE, Azure)
Configuration FormatJSONHCL/JSON
State ManagementNoYes
Execution ControlNoYes
Logical ComparisonsYesLimited
ModularityYesYes, but hard
RecoveryRestores the previous stateYou need to fix your infrastructure in case of break downs
UsabilityTrickerEasy to use CLI

Final verdict

As per our recommendation, you should use CloudFormation if your development is only limited to AWS. But, if you are leveraging multiple clouds, then Terraform is ideal for you.

As always, CloudFountain Inc is here to help if you have more queries and we’ll provide you with complete AWS Serverless Apps Development Services based on your cloud requirements, estimated budget, data volume, and deployed cloud services and infrastructure. Finally, we hope you can identify the right IaC tool for your cloud and make the most out of it.

Author: CloudFountain

We started as a side business in 1999 and have since grown to become a leading provider of IT solutions for businesses. With around 30 employees across several countries, we offer a wide range of services, including IT support, hosting, and custom software development.Over the years, we have served approximately 1000 customers, ranging from small startups to large enterprises. Our mission is to provide cutting-edge technology solutions that help our clients achieve their business goals. We pride ourselves on our exceptional customer service and attention to detail, and we work closely with each client to understand their unique needs and provide tailored solutions that meet their specific requirements.At CloudFountain, we believe that technology can be a powerful tool for growth and success. That’s why we stay on top of the latest trends and advancements in the industry, so we can provide our clients with the best possible solutions. Whether you need IT support, hosting services, or custom software development, our team of experts is here to help. Contact us today to learn more about how we can help your business succeed.