Terraform vs CloudFormation: My Take on Infrastructure as Code

August 16, 2025

Infrastructure as Code (IaC) has revolutionized the way modern organizations manage cloud infrastructure. By automating the provisioning, updating, and management of cloud resources, DevOps teams can scale systems efficiently, reduce human error, and achieve repeatable, auditable environments. Two of the most widely used IaC tools in the cloud ecosystem are Terraform by HashiCorp and AWS CloudFormation. In this article, I’ll share my perspective on how these tools compare, their pros and cons, and which scenarios favor each. This guide is written for cloud engineers, DevOps professionals, and anyone interested in mastering IaC.

What is Infrastructure as Code (IaC)?

Infrastructure as Code is a DevOps practice that allows you to define your infrastructure using machine-readable configuration files instead of manually provisioning resources through a web console. IaC provides benefits such as version control, automated deployments, reproducibility, and easy rollbacks. It integrates seamlessly with CI/CD pipelines, enabling teams to deploy changes rapidly and reliably.

By defining infrastructure in code, teams gain visibility into changes, enforce consistency across environments, and reduce the risks associated with manual configuration. IaC also supports cloud-native practices, allowing resources in AWS, Azure, GCP, and hybrid setups to be managed programmatically.

Overview of Terraform

Terraform is an open-source IaC tool developed by HashiCorp that allows engineers to provision infrastructure across multiple cloud providers with a single, declarative language called HashiCorp Configuration Language (HCL). Terraform is platform-agnostic, which means you can manage AWS, Azure, Google Cloud, Kubernetes, and even on-prem resources using the same tool.

Key Features of Terraform

• Provider Agnostic: Works with multiple cloud providers and services.
• Declarative Syntax: Define the desired state, and Terraform figures out the steps to reach it.
• State Management: Keeps track of resource state to enable incremental changes and accurate deployments.
• Modules: Supports reusable infrastructure modules for DRY (Don't Repeat Yourself) principles.
• Plan & Apply: Terraform lets you preview changes before applying them with terraform plan and terraform apply.
• Extensible: Rich ecosystem of providers and community modules for common infrastructure patterns.

Overview of AWS CloudFormation

AWS CloudFormation is a native AWS service that allows you to define and provision AWS resources using templates written in JSON or YAML. It is deeply integrated into the AWS ecosystem and is optimized for managing AWS-specific resources. CloudFormation automates infrastructure deployment and supports stack-based operations for easy updates and deletions.

Key Features of CloudFormation

• AWS Native: Deep integration with all AWS services and features.
• Declarative Templates: Use JSON or YAML to define desired infrastructure.
• Stack Management: CloudFormation stacks enable group operations on multiple resources.
• Change Sets: Preview changes before applying to avoid breaking existing infrastructure.
• Resource Rollback: Automatic rollback if stack deployment fails.
• Integration with AWS Services: Works seamlessly with AWS CodePipeline, AWS Config, and AWS Service Catalog.

Terraform vs CloudFormation: Key Differences

1. Cloud Provider Support

Terraform is multi-cloud. You can use a single configuration to manage AWS, Azure, GCP, and on-prem resources. CloudFormation, however, is limited to AWS resources. If you work exclusively within AWS, CloudFormation provides native support, but Terraform provides flexibility for hybrid or multi-cloud environments.

2. Language & Syntax

Terraform uses HCL, a simple and readable language designed for infrastructure definitions. CloudFormation uses JSON or YAML. YAML is readable, but complex templates can become hard to maintain. Terraform’s HCL is widely regarded as cleaner, easier to reuse, and more user-friendly for large infrastructures.

3. State Management

Terraform keeps a local or remote state file to track the resources it manages. This state file allows Terraform to calculate differences and apply incremental changes. CloudFormation manages state internally within AWS, which simplifies management but limits visibility for cross-stack or cross-account deployments.

4. Modularity & Reusability

Terraform supports modules — reusable blocks of infrastructure code — which promote maintainability and DRY principles. CloudFormation supports nested stacks, but the modularity is less intuitive, and complex architectures can become difficult to manage.

5. Community & Ecosystem

Terraform has a vibrant community with thousands of open-source modules available in the Terraform Registry. CloudFormation has AWS templates, but community contributions are less extensive. If you rely on multi-cloud resources or want community-driven modules, Terraform often has the edge.

6. Learning Curve

CloudFormation is easier to start if you only use AWS, since it is AWS-native and integrates well with existing AWS tools. Terraform is slightly steeper to learn but pays off in flexibility and readability, especially if you plan multi-cloud deployments or need reusable modules.

Pros & Cons

Terraform Pros

• Multi-cloud support
• Readable syntax (HCL)
• Powerful state management
• Reusable modules
• Strong community and open-source ecosystem

Terraform Cons

• State file management can be tricky for large teams
• Requires extra setup for CI/CD pipelines

CloudFormation Pros

• AWS-native, works seamlessly with AWS services
• Integrated rollback on failures
• Supports AWS-specific constructs
• No external state management needed

CloudFormation Cons

• Limited to AWS
• Complex templates can be hard to maintain
• Less community-driven reusable templates

Use Cases & Recommendations

If your organization is **AWS-only**, CloudFormation is a solid choice. It provides tight integration with AWS services, built-in rollback, and stack management. For teams working with **multiple cloud providers, hybrid setups, or wanting reusable modules**, Terraform is generally more flexible and maintainable.

For CI/CD pipelines, Terraform’s plan/apply workflow is easier to automate and integrate with Jenkins, GitHub Actions, or GitLab CI. CloudFormation works best with AWS CodePipeline.

Best Practices for Infrastructure as Code

• Use version control (Git) for all IaC files
• Modularize code for reusability
• Use separate environments (dev, staging, prod)
• Implement automated testing and validation
• Use secrets management and secure credentials
• Document infrastructure and maintain comments

Terraform vs CloudFormation: Final Thoughts

Both Terraform and CloudFormation are powerful IaC tools. CloudFormation is best for AWS-centric teams wanting native integration and simplicity, while Terraform excels in flexibility, readability, and multi-cloud support. Understanding the trade-offs and strengths of each tool allows DevOps engineers to choose the right tool for their organization and build robust, scalable, and automated cloud infrastructure.

Mastering Infrastructure as Code is essential for modern DevOps engineers. Whether you choose Terraform, CloudFormation, or both, the principles of automation, reproducibility, and scalability remain the same. Implementing IaC reduces downtime, minimizes errors, and accelerates delivery pipelines — a must-have skill set for cloud-native professionals.

— See you, Volkrin