What is Terraform, how does it work, and what are the best practices?

In the ever-changing cloud computing and infrastructure management field, staying ahead of the curve is vital. As organizations aspire for agility, scalability, and efficiency in their operations, adopting Infrastructure as Code (IaC) has become a cornerstone in achieving these goals. Among the various solutions available, Terraform has emerged as a game changer, allowing teams to provision and manage infrastructure declaratively and automatically.

The IaC market is projected to grow from USD 0.8 billion in 2022 to USD 2.3 billion by 2027, with a 24% CAGR. 

In this article, we will go into the world of Terraform, demystifying its core concepts, explaining how it works, and highlighting the best practices that will improve your IaC game. 

Whether you’re a seasoned DevOps engineer or a curious newcomer to infrastructure automation, this guide will provide you with the information and tools you need to maximize Terraform’s potential.

What is Terraform?

Terraform, created by HashiCorp, is an open-source Infrastructure as Code tool that allows for the safe and efficient development, modification, and versioning of infrastructure components. It has a declarative syntax that enables users to utilize a configuration language to express the intended state of their infrastructure.

What do we mean by Infrastructure as Code?

Infrastructure as Code (IaC) is a software engineering and system administration approach that involves managing and providing computing infrastructure via machine-readable script files rather than physical hardware setup or interactive configuration tools. 

In a nutshell, IaC enables developers and system administrators to define and manage infrastructure (such as servers, networks, and storage) through code written in a high-level, human-readable language. This code, like software, can be version-controlled, tested, and deployed, allowing for a methodical and automated approach to setting and managing IT infrastructure. 

Work Flow of IAC

Image Source

Infrastructure as Code (IaC) and traditional infrastructure management are two techniques to dealing with computer environments. Configurations in traditional infrastructure are often set up manually via graphical or command-line interfaces, resulting in time-consuming and error-prone operations. IaC, on the other hand, uses scripting language code to automate the configuration of infrastructure components. This code is versioned, allowing for quick, consistent, and repeatable deployments. 

Traditional infrastructure’s manual nature can lead to inconsistencies and scaling issues, but IaC’s code-based approach provides uniformity, scalability, and adaptability. IaC’s inbuilt version control provides accurate tracking of changes, simple collaboration, and dependable documentation, distinguishing it from traditional infrastructure management’s more manual and less agile approaches.

How Terraform enables infrastructure to be represented as code

Terraform is an essential tool in the Infrastructure as Code (IaC) paradigm, allowing organizations to define and manage their infrastructure through code-like configurations. This technique allows users to declare the relationships and attributes of multiple components while defining the desired state of their infrastructure using declarative terminology. 

Image Source – Terraform code for Azure deployment example

Terraform’s code, written in a high-level scripting language, transforms into a human-readable model of the infrastructure, promoting clarity and cooperation. Terraform’s ability to easily connect with many infrastructure providers guarantees a consistent and scalable IaC methodology. Its unique capability of creating execution plans prior to deployment improves safety by providing users with a preview of changes and enabling controlled and predictable infrastructure evolution.

How Terraform works

Terraform allows users to define and regulate their whole infrastructure using configuration files and version control, and it employs two basic components in its architecture: Core and Providers.

Terraform Core Mechanics

Terraform Core receives input from two primary sources. The first is the user-configured source input, which specifies the resources that will be produced or provided. The second type of input is data feeds into Terraform that detail the present state of the infrastructure.

Terraform Architecture

Image Source

Terraform determines essential actions by digesting these inputs. It compares the desired state to the present state and orchestrates the architecture to bridge gaps. In essence, Terraform Core determines which pieces must be created, modified, or removed to furnish the infrastructure fully.

Terraform Provider Dynamics 

Incorporating providers intended for certain technologies is the second critical component moving Terraform forward. While most people connect with big cloud providers like AWS or Azure, providers can also refer to numerous infrastructure or platform-as-a-service solutions. For example, Kubernetes can be used as a provider by Terraform.

Terraform, with over a hundred suppliers spanning several technologies, gives customers access to diverse resources. Terraform seamlessly taps into resources such as EC2 instances within the technology stack, whether AWS or Azure. This enables customers to design multi-tier infrastructures, such as integrating Kubernetes with Azure.

Terraform Use Cases and Key Features

Terraform’s adaptability spans a wide range of use cases, making it a go-to tool for various infrastructure management scenarios. Three significant use cases demonstrate Terraform’s breadth of capabilities.

Multi-Cloud Support and Providers

Terraform stands out for its outstanding support across primary cloud providers such as AWS, Azure, and Google Cloud. This allows users to manage various cloud environments uniformly and consistently. Terraform’s multi-cloud compatibility means businesses can orchestrate infrastructure across several platforms without being beholden to a single cloud vendor.

Image Source

Terraform providers serve as plugins that interface with many cloud platforms, providing a standardized resource management method. This modular approach enables users to declare resources using a standardized syntax, making it simple to manage and deliver infrastructure components across several clouds. Terraform provides a consistent language for resource provisioning, whether deploying instances on AWS or virtual machines on Azure.

Code Reusability with Terraform Modules

Terraform Modules are a vital element of code organization and reuse. These modules contain reusable and shareable infrastructure configuration components. Consider them building blocks that can be readily integrated into various projects, promoting a modular and orderly structure for Terraform code.


Image Source

Terraform Modules provide enormous benefits to infrastructure projects. The ability to reuse code lowers redundancy and encourages uniformity across projects. Changes made to a module are reflected globally, improving maintenance and reducing the risk of errors. Modular architecture simplifies code organization and speeds up development cycles by allowing developers to use pre-built modules to build complicated infrastructures more efficiently.

Version Control and Collaboration

Version control is integral to infrastructure management, and Terraform works effortlessly with version control systems such as Git. This enables enterprises to track changes, have a historical record of setups, and manage different versions of their infrastructure code. Version control guarantees that changes are documented, reversible, and auditable, laying the groundwork for effective configuration management.

Terraform is an excellent tool not only for version control but also for promoting cooperation across development teams. Teams can collaborate on projects, merge code changes, and resolve conflicts in a way comparable to software development processes by modelling infrastructure as code. This collaborative method improves communication, transparency, and efficiency across multiple teams controlling infrastructure configurations.

How to get started with Terraform

To get started, install Terraform on your local workstation. The most recent version is available for download from the Terraform website. Once downloaded, follow your operating system’s installation instructions. After successful installation, run terraform -v to ensure Terraform is accessible from the command line. This ensures that Terraform is installed correctly and ready to use.

Consider enabling version control for your Terraform configurations next. Create a new Git repository and make your first commit. Version control is essential for properly tracking changes and coordinating with others.

Writing your first Terraform configuration file

HashiCorp Configuration Language (HCL) is used to write Terraform configurations. To set up your infrastructure, create a new file, such as main.tf. Begin with simple resources such as an AWS S3 bucket.

Terraform Workshop: Automated Account and S3 Bucket Creation on AWS | Admantium

Image – setting up your Terraform infrastructure

This example will set up an AWS S3 bucket in the US East (Northern Virginia) region. The cloud provider is specified in the provider block, and the S3 bucket is defined in the resource block.

Management of Infrastructure on Popular Cloud Providers

Terraform is particularly good at managing infrastructure across several cloud providers. Authenticate with your cloud provider(s) by configuring the appropriate credentials before applying configurations. For AWS, you can use environment variables or AWS CLI settings to set your AWS Access Key ID and Secret Access Key.

After you’ve been authenticated, go to the directory containing your Terraform configuration file and perform the following commands:

Hello World!” On Terraform | Collbow.com

Image – Terraform commands post authentication

The terraform init command sets up your working directory and downloads any required plugins and modules. The terraform apply command runs the setup and prompts you to validate the changes. After reviewing the modifications, type yes to apply, and Terraform will provision the infrastructure requested.

Adjust the provider blocks in your configuration file accordingly for multi-cloud scenarios. Terraform’s standard syntax makes managing resources across AWS, Azure, GCP, Oracle Cloud, Docker, and other supported providers simple.

Explore the “Get Started” tutorials on the Terraform website as a supplemental resource since they provide hands-on instruction for generating basic setups and deploying resources.

Terraform in Action

Terraform creates and manages infrastructure resources by communicating with APIs. Deploying and configuring resources requires sending requests to the APIs of cloud providers or other platforms. Terraform abstracts the complexities of API interactions by allowing users to define their infrastructure in a high-level language while leaving the tool to handle the complexities of communicating with various APIs.

Utilization of Providers to Interface with Various Platforms and Services

Providers act as a link between Terraform and various platforms or services. These plugins allow Terraform to read and interact with specific technology APIs, such as cloud providers or databases. Terraform enables a uniform and modular approach to managing resources across multiple platforms by utilizing providers, reinforcing its adaptability to various infrastructures.

Image Source

Code Workflow Stages

There are three code workflow stages within the Terraform platform.

  1. Write

Users define their desired infrastructure configuration using HashiCorp Configuration Language (HCL) at Terraform’s basic workflow’s “Write” stage. This entails producing a Terraform configuration file (e.g., main.tf) specifying resources, providers, and configurations. Users provide the required infrastructure, including cloud regions, instances, and dependencies.

  1. Plan

Following the definition of the infrastructure, the terraform plan command is used to build an execution plan. Terraform evaluates the configuration and the current state before calculating the proposed adjustments needed to achieve the desired state. The execution plan details the operations Terraform will do, such as resource creation, modification, or deletion. This enables users to examine and validate modifications before implementing them.

  1. Apply

When users are happy with the execution plan, they use the terraform apply command to execute the changes. Terraform then executes the planned activities in the correct order, taking into account resource dependencies. Users confirm the suggested modifications during this stage, and Terraform orchestrates the necessary API calls to make the desired infrastructure a reality. As a result, changes are implemented in a controlled and predictable manner.

Best Practices for Terraform

Structuring Terraform code is critical for collaboration and maintainability. Use directories for distinct components or contexts to create a modular approach. Keep the codebase organized by grouping relevant resources and modules. Maintain consistent naming standards to improve code readability. Create a clear module structure and use directories for different environments or setups. A well-organized codebase facilitates maintenance and scalability as your infrastructure expands.

Maintainability and Readability

The importance of maintainability and readability of Terraform code cannot be overstated. Use relevant resource and variable names, together with descriptive comments. Use a consistent coding style and best practices to ensure code is easy to read. Prioritize simplicity over excessive complication. Consider future code maintainers, making it accessible and understandable to everyone interested in the project.

Variables and Data Sources

To parameterize your settings, use Terraform variables. Use input variables to generate dynamic values, increasing code flexibility. Use output variables to capture and distribute data between modules. Data sources provide dynamic information retrieval, maximizing the usage of external data. Strive for flexibility and control, strategically employing variables and data sources for dynamic yet controlled configurations.

State Management Strategies

For collaborative projects, effective state management is crucial. To store Terraform state remotely, use remote backends such as AWS S3 or HashiCorp Consul. By providing a centralized and secure state repository, this encourages collaboration. Use locking methods to prevent concurrent changes and avoid conflicts in collaborative situations. Select a backend that meets your security and collaboration needs.

The secure handling of Terraform state is critical, particularly in collaborative projects. You can avoid storing critical information in plain text by leveraging remote backends with encryption features. To restrict state access, use access controls and permissions. Audit and analyze state files regularly to identify and mitigate potential security threats. Prioritize secure state handling to protect sensitive data and the integrity of your infrastructure.

Final Thoughts

Throughout this post, we’ve looked at Terraform’s fundamentals, delving into its position as an Infrastructure as Code (IaC) tool and its ability to define, manage, and automate infrastructure. We addressed its core features, use cases, and best practices, providing insights into how Terraform enables enterprises to achieve consistency, scalability, and efficiency in infrastructure management.

Terraform implementation demands experience in software development processes. Software developers are essential in creating Terraform configurations that are well-structured, maintainable, and scalable. Their knowledge of best coding practices ensures that Terraform code corresponds with project requirements, allowing easy integration into the larger development lifecycle.

ParallelStaff is a nearshore solution provider for enterprises seeking expertise in software development. ParallelStaff can meet a wide range of project requirements by providing important services such as software development, quality assurance, and dedicated team augmentation.

Working with ParallelStaff provides various benefits, including access to a pool of competent and experienced developers, cost-effective solutions, and the option to scale development teams based on project needs. The nearshore model promotes efficient communication and collaboration by ensuring time zone synchronization.

Are you ready to take your software development initiatives to the next level? Schedule a conversation with ParallelStaff to discuss tailored solutions that match your specific requirements. ParallelStaff is dedicated to delivering excellence in every project, whether it is Terraform implementation, software development, or dedicated team augmentation.

Miguel Hernandez

Want to Learn More? 

Reach out to us about working for ParallelStaff.
© 2018-2024 Parallel Staff, Inc. | Privacy Policy