Scope: CloudFormation is very powerful because it is developed and supported directly by AWS, but Terraform has a great community that always works at a fast pace to ensure new resources, and features are implemented for providers quickly.
Type: CloudFormation is a managed service by AWS, but Terraform has a CLI tool that can run from your workstation, a server, or a CI/CD system (such as Jenkins, GitHub Actions, etc.) or Terraform Cloud (a SaaS automation solution from HashiCorp).
License and support: CloudFormation is a native AWS service, and AWS Support plans cover it as well. Terraform is an enterprise product and an open source project. HashiCorp offers 24/7 support, but at the same time, the huge Terraform community and provider developers are always helpful.
Syntax/language: CloudFormation supports both JSON and YAML formats. Terraform uses HashiCorp Configuration Language (HCL), which is human-readable as well as machine-friendly.
Architecture: CloudFormation is an AWS-managed service to which you send/upload your templates for provisioning; on the other hand, Terraform is a decentralized system with which you can provision infrastructure from any workstation or server.
Modularization: In CloudFormation, nested stacks and cross-stack references can be used to achieve modularization, while Terraform is capable of creating reusable and reproducible modules.
User experience/ease of use: In contrast to CloudFormation, which is limited to AWS services, Terraform spans multiple cloud service providers such as AWS, Azure, and Google Cloud Platform, among others. This flexibility allows Terraform to provide a unified approach to managing cloud infrastructure across multiple providers, making it a popular choice for organizations that use more than one cloud provider.
Life cycle and state management: CloudFormation stores the state and manages it with the use of stacks. Terraform stores the state on disk in JSON format and allows you to use a remote state system, such as an AWS S3 bucket, that gives you the capability of tracking versions.
Import from existing infrastructure: It is possible to import resources into CloudFormation, but only a few resources are supported. It is possible to import all resources into Terraform state, but it does not generate configuration in the process; you need to handle that. But there are third-party tools that can generate configuration, too.
Verification steps: CloudFormation uses change sets to verify the required changes. Terraform has a powerful plan for identifying changes and allows you to verify your changes to existing infrastructure before applying them.
Rolling updates and rollbacks: CloudFormation automatically rolls back to the last working state. Terraform has no feature for rolling updates or rollbacks, but you can build a rollback system using a CI/CD system.
Multi-cloud management: CloudFormation is AWS-only, but Terraform supports multiple cloud providers and many more services.
Compliance integration: CloudFormation is built by AWS, so compliance is already assured, but for Terraform, you need to implement third-party tools yourself to achieve compliance.
Deployment type: CloudFormation has a built-in CI/CD system that takes care of everything concerning deployment and rollbacks. Terraform can be deployed from any system, but you need to build your CI/CD workflow or adopt a service that can fill the gaps.
Drift detection: Both tools have drift detection by default.
Cost: Using AWS CloudFormation does not incur any additional charges beyond the cost of the AWS resources that are created, such as Amazon EC2 instances or Elastic Load Balancing load balancers. In contrast, Terraform is an open source project that can be used free of charge. However, to obtain enterprise-level features such as CI/CD automation and state management, you may need to consider using additional services and systems provided by HashiCorp or third-party service providers. These additional services may come with their own costs.
Type: CloudFormation is a managed service by AWS, but Terraform has a CLI tool that can run from your workstation, a server, or a CI/CD system (such as Jenkins, GitHub Actions, etc.) or Terraform Cloud (a SaaS automation solution from HashiCorp).
License and support: CloudFormation is a native AWS service, and AWS Support plans cover it as well. Terraform is an enterprise product and an open source project. HashiCorp offers 24/7 support, but at the same time, the huge Terraform community and provider developers are always helpful.
Syntax/language: CloudFormation supports both JSON and YAML formats. Terraform uses HashiCorp Configuration Language (HCL), which is human-readable as well as machine-friendly.
Architecture: CloudFormation is an AWS-managed service to which you send/upload your templates for provisioning; on the other hand, Terraform is a decentralized system with which you can provision infrastructure from any workstation or server.
Modularization: In CloudFormation, nested stacks and cross-stack references can be used to achieve modularization, while Terraform is capable of creating reusable and reproducible modules.
User experience/ease of use: In contrast to CloudFormation, which is limited to AWS services, Terraform spans multiple cloud service providers such as AWS, Azure, and Google Cloud Platform, among others. This flexibility allows Terraform to provide a unified approach to managing cloud infrastructure across multiple providers, making it a popular choice for organizations that use more than one cloud provider.
Life cycle and state management: CloudFormation stores the state and manages it with the use of stacks. Terraform stores the state on disk in JSON format and allows you to use a remote state system, such as an AWS S3 bucket, that gives you the capability of tracking versions.
Import from existing infrastructure: It is possible to import resources into CloudFormation, but only a few resources are supported. It is possible to import all resources into Terraform state, but it does not generate configuration in the process; you need to handle that. But there are third-party tools that can generate configuration, too.
Verification steps: CloudFormation uses change sets to verify the required changes. Terraform has a powerful plan for identifying changes and allows you to verify your changes to existing infrastructure before applying them.
Rolling updates and rollbacks: CloudFormation automatically rolls back to the last working state. Terraform has no feature for rolling updates or rollbacks, but you can build a rollback system using a CI/CD system.
Multi-cloud management: CloudFormation is AWS-only, but Terraform supports multiple cloud providers and many more services.
Compliance integration: CloudFormation is built by AWS, so compliance is already assured, but for Terraform, you need to implement third-party tools yourself to achieve compliance.
Deployment type: CloudFormation has a built-in CI/CD system that takes care of everything concerning deployment and rollbacks. Terraform can be deployed from any system, but you need to build your CI/CD workflow or adopt a service that can fill the gaps.
Drift detection: Both tools have drift detection by default.
Cost: Using AWS CloudFormation does not incur any additional charges beyond the cost of the AWS resources that are created, such as Amazon EC2 instances or Elastic Load Balancing load balancers. In contrast, Terraform is an open source project that can be used free of charge. However, to obtain enterprise-level features such as CI/CD automation and state management, you may need to consider using additional services and systems provided by HashiCorp or third-party service providers. These additional services may come with their own costs.
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