Terraform is a powerful tool for provisioning cloud infrastructure, but it’s not enough to handle the complexities of Azure and GCP. Here’s why:
Terraform is a great starting point, but combining it with the right tools and strategies will help you unlock the full potential of Azure and GCP while saving time, money, and effort.
Terraform is great for provisioning resources, but when it comes to managing the more advanced needs of Azure and GCP environments, it often falls short. For many UK SMBs and scaleups, these gaps can lead to real challenges, especially when comprehensive cloud management is needed - not just basic resource deployment.
Terraform handles the basics well but struggles with the advanced, platform-specific features that make Azure and GCP stand out. Both providers offer powerful native tools for identity management, auto-scaling, and monitoring that Terraform can't fully utilise.
Take Azure's Managed Identity, for example. It simplifies authentication by eliminating the need to store credentials. But with Terraform, you’re stuck with complex workarounds or less secure service principals. Similarly, GCP’s Cloud Functions can become a headache to configure when Terraform is the sole management tool.
Monitoring and alerting are another weak spot. Azure Monitor and GCP’s Cloud Operations suite offer advanced observability features that integrate seamlessly with their ecosystems. While Terraform can create basic monitoring resources, it doesn’t support the custom dashboards, nuanced alerting policies, or automated remediation workflows that these native tools provide.
"Terraform security refers to the set of practices and techniques used to ensure the security of Terraform infrastructure as code (IaC) deployments." – Aqua Security
These shortcomings often force teams into manual interventions or custom scripts, increasing the risk of vulnerabilities like unauthorised access, injection attacks, misconfigured permissions, and even insider threats.
Terraform’s reliance on a state file can lead to serious operational headaches. If the state file becomes out of sync with the actual infrastructure, configuration drift can occur - and the consequences can be severe, including data loss. In fact, more than 50% of users report state-related issues. Detecting and fixing these problems often requires manual refreshes, adding to the operational burden.
Managing state files can be a time sink, especially when conflicts arise or drift issues need resolving. For complex setups, applying these changes can take days. This kind of overhead is a major drawback for businesses that need to move quickly.
Terraform's design doesn’t make team collaboration easy, which can be a significant problem for UK SMBs and scaleups with growing engineering teams.
"Terraform often feels like it was designed to be managed by a TF czar who has the old school gatekeeper ops mentality." – Eric Larssen, Real Kinetic Blog
This "Terraform czar" model means that a single person, often with elevated permissions, becomes responsible for managing configurations. This creates bottlenecks and makes it hard for teams to collaborate effectively. When multiple team members work on the same configuration, conflicts and state issues are almost guaranteed.
While splitting infrastructure into smaller stacks can help, it comes with its own complications, like hard-coded dependencies and deployment challenges. This approach works best for small teams but doesn’t scale well as businesses grow. For UK scaleups, distributing infrastructure responsibilities across a larger team while maintaining security and consistency becomes a major challenge.
Terraform also lacks built-in permissions enforcement, forcing teams to rely on complex repository structures or third-party tools to manage deployments. This takes time and resources away from core business activities and slows down the pace of innovation. These limitations often push companies to explore cloud-native tools that better align with their operational needs.
Terraform struggles to fully utilise the advanced cloud-native features offered by Azure and GCP. For UK SMBs and scaleups, this means relying on complex workarounds that can increase operational risks and inefficiencies.
For businesses in the UK, Terraform’s inability to handle platform-specific integrations often results in missed opportunities to optimise operations and cut costs. While Azure and GCP provide advanced tools for compliance and workflow automation, Terraform is limited to basic resource provisioning, which restricts deeper platform integration.
Take Azure Blueprints and GCP Workflows, for example. These tools enable seamless compliance management and automated workflows. GCP Workflows, in particular, allows users to integrate Google Cloud services and APIs to automate processes and build robust applications. Terraform, on the other hand, operates on a desired-state model and lacks event-driven capabilities, making it less effective in leveraging these advanced features.
These limitations make it clear why additional tools are necessary to unlock the full potential of Azure and GCP.
For UK SMBs and scaleups, Terraform’s inability to manage cloud costs can have a sizeable financial impact. Research shows that many organisations waste significant cloud spend due to idle resources and weak budget enforcement. Yet, Terraform doesn’t offer native cost monitoring or tools to detect anomalies. According to S&P Global, there’s an estimated £19 billion in potential cloud savings annually.
Terraform cannot identify overprovisioning, idle resources, or hidden charges because it lacks built-in cost management features. For businesses operating on tight budgets, this inefficiency translates into wasted funds - money that could be redirected towards growth and innovation.
These cost challenges are further compounded by gaps in automation, which add to operational strain.
When it comes to advanced operational automation, Terraform’s limitations become even more apparent. UK scaleups managing complex applications often require event-driven automation and sophisticated error handling - areas where Terraform falls short. This leaves deployments vulnerable to manual intervention and inconsistent states.
For instance, Azure and GCP offer native automation features that address security incidents with automatic isolation, alerts, and remediation workflows. Terraform, however, cannot support dynamic workflows or participate in real-time responses.
Policy enforcement is another weak spot. While Terraform can create resources using templates, it cannot ensure ongoing compliance or detect unauthorised changes until a manual audit is conducted. By contrast, tools like the Google Cloud Operations Suite provide intelligent automation that monitors, logs, and manages application performance. These tools can detect anomalies, correlate events, and trigger appropriate responses based on complex conditions. Terraform, at best, can create basic monitoring resources but lacks the ability to implement these advanced capabilities.
For UK scaleups, these automation gaps lead to more manual tasks, a higher risk of outages, and slower incident response times. Every hour spent on manual operations is an hour not invested in product development or delivering value to customers.
For UK SMBs and scaleups, enhancing Terraform with specialised tools can address its limitations without requiring a complete overhaul of your infrastructure. By combining Terraform with Kubernetes operators, cloud-native automation, and FinOps tools, you can tackle its weak points effectively. Let’s dive into how these solutions work together to close the gaps.
Kubernetes operators provide a dynamic solution to Terraform's manual drift detection methods. While Terraform relies on manual planning to identify and resolve drift, operators continuously monitor and automatically correct changes in your infrastructure.
Tools like GCP Config Connector and Azure Service Operator (ASO) are particularly useful for UK businesses managing multi-cloud environments. These operators allow Kubernetes to manage cloud resources using YAML configurations, ensuring that drift is automatically reconciled.
Take Azure Service Operator as an example. It enables you to deploy and manage Azure resources - such as Redis Cache or PostgreSQL database servers - directly through Kubernetes tooling. You can then configure your Kubernetes application to use these resources seamlessly. This integration bridges the gap between infrastructure provisioning and application deployment, an area where Terraform often struggles.
However, this approach does come with added complexity. Kubernetes operators require a deeper level of expertise and can be harder to troubleshoot compared to Terraform. While they excel at drift management, cloud-native automation tools are needed to address Terraform’s operational shortcomings.
Terraform’s limitations are most evident when it comes to event-driven automation. Today’s cloud environments demand systems that can respond to incidents, scale resources on demand, and automate workflows without manual intervention.
Tools like Azure Automation and GCP Cloud Functions address these gaps by offering serverless automation that integrates directly with cloud services. These tools can handle tasks like triggering security responses, remediating drift, and executing operational workflows that Terraform alone cannot manage.
The HCP Terraform Operator for Kubernetes is another tool worth mentioning. It enables you to create agent pools, deploy modules, and manage workspaces via Kubernetes controllers. This bridges Terraform’s infrastructure provisioning capabilities with Kubernetes’ operational automation, creating a more cohesive workflow.
For UK scaleups, a hybrid approach often works best. Terraform can handle the initial resource provisioning, while cloud-native automation tools take over for ongoing operations. This strategy reduces the learning curve while addressing Terraform’s operational gaps, setting the stage for better cost management.
Once operational efficiency is improved, the next challenge is managing costs - a critical concern for UK businesses operating on tight budgets. Several tools can integrate with Terraform to provide the cost visibility and control you need.
Infracost is a standout option for Terraform users. It offers cloud cost estimates directly within your Terraform workflow, providing detailed cost breakdowns before you make changes. The open-source version handles basic cost estimation, while the SaaS version adds features like best practice checks and tagging policy setups.
For ongoing cost management, native tools like Azure Cost Management + Billing offer a centralised platform to monitor and manage billing. These tools can work alongside Terraform by tracking the resources it provisions and alerting you to anomalies or unexpected expenses.
To make the most of these tools, ensure consistent use of cost allocation tags in your Terraform configurations. This allows you to track spending by project, department, or customer, giving you the granular visibility needed to optimise costs. Regular billing reviews can then highlight areas for further savings that might otherwise go unnoticed in Terraform workflows.
Creating a reliable and efficient cloud environment takes more than just setting up Terraform configurations. To truly address its limitations, you need to combine Terraform's strengths with complementary tools and operational strategies. The aim? Build a cloud stack that scales smoothly while keeping costs in check and avoiding vendor lock-in.
Pairing Terraform with cloud-native tools can help you overcome its shortcomings without losing its core benefits.
Start with remote state management. Store your state files in remote backends like Azure Blob Storage or Google Cloud Storage. Make sure encryption, versioning, and state locking are enabled. This prevents conflicts when multiple team members are working on the same infrastructure and ensures consistency across deployments.
Separate environments into distinct state files or workspaces for development, staging, and production. This keeps production resources safe from accidental changes while giving you the flexibility to customise each environment. Each should have its own backend configuration for complete separation.
Create reusable modules for common infrastructure patterns such as web servers, databases, or monitoring systems. These modules should be designed with clear variable parameters, so you don’t have to duplicate code across projects. They should also account for differences between providers while maintaining flexibility.
Integrate policy enforcement tools like Azure Policy or Google Cloud Organization Policy. By defining policies as code, you can enforce consistency, automate compliance, and version control your infrastructure.
Adopt a GitOps workflow to manage Terraform configurations. Use version control and CI/CD pipelines to automate deployments. This ensures that every change is tracked, reviewed, and tested before it reaches production, reducing the risk of errors.
Once your infrastructure stack is running efficiently, it’s time to focus on improving operational processes.
Operational success depends on scaling processes alongside your business needs, cutting down on manual work, and complementing your technical stack.
Set up comprehensive monitoring and alerting for both infrastructure and applications. Tools like Azure Monitor or Google Cloud Operations Suite can track performance metrics, resource usage, and cost anomalies. Automate responses to common issues with action groups to reduce manual intervention.
Conduct regular infrastructure reviews to uncover optimisation opportunities and security gaps. Monthly audits using tools like Azure Security Centre or Google Cloud Security Command Centre can help detect misconfigurations and compliance issues. These reviews should include cost analysis, security checks, and performance tweaks.
Implement consistent tagging policies for better cost tracking and resource management. Use Terraform to enforce tagging standards, enabling you to monitor spending by project, department, or customer. This visibility makes it easier to identify resources that can be optimised or retired.
With operational practices in place, ensure your architecture remains adaptable to avoid over-reliance on any single provider.
Flexibility in your cloud architecture is key to avoiding dependency on a single provider while still benefiting from their unique features.
Leverage containerisation to make applications portable across different cloud platforms. Containers allow workloads to run on various environments, making it easier to adapt if your business needs change.
Build abstraction layers between your applications and cloud services where it makes sense. This reduces the risk of tying critical business logic to provider-specific tools while still letting you use cloud-native features when needed.
Plan for workload portability. As Oliver Presland from Ensono explains:
"But if those goals change or other applications would be better suited with a different provider, you want to be able to move workloads and get the best available."
Assess which workloads need to remain portable and which can benefit from deeper integration with a specific provider.
Design for data portability. Nitha Puthran from Persistent Systems highlights:
"Data can be more expensive and more difficult to move than the application."
Think about potential migration scenarios when designing your data architecture to avoid costly moves later.
Maintain multi-cloud expertise within your team, even if you primarily use one provider. Being familiar with the strengths of various platforms gives you the flexibility to make informed decisions about workload placement.
Document all dependencies, including third-party tools, data flows, and service interconnections. Regularly mapping these dependencies helps you identify and mitigate potential lock-in risks before they become a problem.
Terraform’s impressive popularity - boasting 39,800 GitHub stars and contributions from 1,800 developers - is a testament to its capabilities. But for UK SMBs and scaleups, relying solely on Terraform can create operational hurdles that slow down progress. To tackle these challenges and streamline cloud operations, here’s a breakdown of essential steps.
The earlier challenges and solutions discussed highlight the need for a balanced approach to cloud management. Terraform’s drawbacks can impact your time-to-market, operational efficiency, and overall costs. Missteps in its implementation can lead to technical debt, security risks, scalability issues, and vendor lock-in.
Addressing these areas can turn cloud challenges into strategic advantages for your business.
For UK SMBs and scaleups looking to bridge these gaps, Critical Cloud offers tailored solutions. Our Engineer Assist service (£400/month) provides Slack-based engineering support, infrastructure reviews, and alert tuning to ensure smooth operations.
If cost management is a priority, our FinOps add-on (£400/month) delivers anomaly detection and alerts, complementing your Terraform workflows. For those seeking comprehensive support, the Ops Bundle (£1,000/month) covers resilience, security, and cost optimisation - addressing all the areas where Terraform may fall short.
Terraform doesn’t need to be abandoned, but its limitations must be acknowledged. By integrating additional tools, refining processes, and leveraging expert guidance, you can retain Terraform’s strengths while effectively addressing its gaps. With the right strategy, your cloud operations can become a powerful driver for growth.
Managing Azure and GCP environments using Terraform alone can present a few hurdles that are worth considering:
While Terraform is a robust tool for infrastructure as code, these limitations underline the importance of pairing it with other tools and strategies to simplify and enhance cloud operations.
Terraform is a fantastic tool for Infrastructure as Code (IaC), but it does have its limits, particularly in areas like advanced automation, cost management, and seamless integration with cloud-native services. By combining Terraform with cloud-native tools, UK-based SMBs and scaleups can overcome these challenges and streamline their cloud operations.
For instance, tools such as TFLint can be used for code linting, ensuring your code adheres to best practices, while Open Policy Agent helps enforce policies to minimise errors. Adding cost management tools into the mix can address common issues like overprovisioning or idle resources, which are especially important for businesses working within tight budgets. These integrations not only expand Terraform's functionality but also make cloud management more efficient and budget-friendly for smaller, fast-growing companies.
To address cost management challenges when using Terraform on Azure or GCP, here are some practical steps you can take:
By applying these methods, you can manage costs more effectively and maximise the value of Terraform without overspending.