What Is Infrastructure as Code? Managing Infrastructure with Terraform

What is infrastructure as code?

Infrastructure as code (IaC) is the practice of creating and managing servers, networks, databases, and other infrastructure through definition files instead of manual clicks in a control panel. In practice, teams keep these files in version control, review them, and run them to get the same result every time. In short, infrastructure becomes software.

Think of a restaurant kitchen. So if a cook sets it up from memory every time, the layout changes. However, with a written plan and a list of measurements, anyone can build the same kitchen. IaC is that written plan for your infrastructure.

This article covers one term: infrastructure as code, along with its best known tool, Terraform. We do not push any product, because understanding matters more. Instead, we explain the idea, the way it works, its benefits, and its risks in plain language. Neighboring terms appear only in the comparison table and in short context.

What is infrastructure as code and how does it differ from manual setup?

In a manual setup, a person opens a cloud console, creates a server, adds a security rule, and configures a database. Also, most of these steps live only in someone's memory or in a few screenshots. Still, at a small scale this works fine. As the environment grows, however, nobody knows who changed what, or why.

With IaC, every resource has a definition in a file. Someone who wants a change edits the file first, and a teammate reads that change before it goes live. So an infrastructure change gets proposed, approved, and rolled back just like a code change.

• Manual setup: Starts fast, but keeps no record and is hard to repeat.
• Setup with code: Needs effort at the start, but you can repeat and audit it.
• Mixed setup: Half manual and half code is the riskiest state of all.

In practice, the mixed state is especially dangerous. Your code drifts away from the real environment, and nobody knows which one to trust.

How does infrastructure as code work?

In short, the workflow has three steps. First, you write the infrastructure you want in a definition file. Then the tool compares that definition with the real environment and shows what will change. Finally, once you approve, the tool applies the changes through the provider's API. An API, or application programming interface, is simply the way software talks to other software.

Terraform's official documentation describes this flow as write, plan, and apply. The plan step answers the question "what will happen?" The apply step carries out the approved change. The tool also works out dependencies between resources. For example, it will not create a database before the network exists.

The value of this flow is predictability. Put simply, you see what a change will do before it runs. As a result, surprises become rare.

One more idea matters here: running the same definition twice should give the same result. For example, suppose you asked for three servers and three already exist. As a result, the tool creates nothing new. Running the file again is safe, because the tool applies only the difference.

What is the difference between declarative and imperative approaches?

In a declarative approach, you describe the result you want. On the other hand, in an imperative approach, you write the steps that lead to that result in order. The first says "there should be three servers." The second says "create one server, then create another one."

Terraform and OpenTofu work declaratively. Their official documentation stresses that you do not have to write step by step instructions. So the tool calculates the gap between the current state and the desired state, and it does only what is necessary.

Neither style wins in every case. Still, the declarative style fits infrastructure naturally, because the question "what should exist?" usually matters more than "how do I build it?"

What is a state file and why does it matter so much?

State is the record that links the real resources a tool manages to the definitions in your files. Terraform's documentation describes state as the place that stores bindings between objects in a remote system and the resource instances declared in your configuration. The tool knows what it manages because of this record.

Without state, the tool could not answer "does this server already exist, or should I create it?" That is why state acts like the source of truth for your environment. Also, if it disappears, the tool no longer recognizes the environment. Likewise, if it breaks, the tool may make wrong decisions.

State is also more than a technical detail. Moreover, it holds resource details and sometimes sensitive values. So do not treat it like an ordinary file.

• The official docs warn against storing state somewhere without locking support or access control.
• For teamwork, we suggest a remote storage location, often called a remote backend.
• In practice, locking stops two people from changing the state at the same time.

Add one more rule: never edit the state file by hand. Instead, the tool's own commands exist to change that record safely. Otherwise, a manual edit can leave the record out of sync with reality. If you run into trouble, check your backup and the official documentation first.

What do plan and apply mean in practice?

A plan is a preview of a change before you run it. The tool reads your definitions and the state, checks the real environment, and lists what it will add, change, or delete. Apply then carries out that plan. So separating the two steps helps you catch a faulty change before it reaches production.

Example scenario: a team wants to rename a database in a test environment. The plan output shows that the change would delete the old database and create a new one. Then the team notices this and changes its approach. Otherwise, they could have lost data.

For this reason, reading the plan should become a habit. Above all, pay special attention to lines about deleting and recreating resources. Before you approve, someone other than the author should look at the plan too.

The output may look crowded at first. After a few tries, though, it gets easier to read. First, start with the number of added, changed, and destroyed resources. Then check whether any line surprises you. In practice, every surprising line is a signal to stop and ask.

What is Terraform and how does it relate to infrastructure as code?

Terraform is an IaC tool from HashiCorp. According to its official description, it lets you build, change, and version cloud and on-premises resources through human readable configuration files. In other words, Terraform is not a term. It is a tool that puts the IaC idea into practice.

Terraform manages resources through providers. In short, a provider is a plugin that talks to the API of a specific platform. The official documentation says the registry offers providers for many platforms, such as cloud services, Kubernetes, and code hosting services.

The tool also offers modules. In other words, a module turns a repeated piece of infrastructure into a reusable package. So you do not rewrite the same network layout in every project.

Check current features and version details in the official Terraform introduction. Therefore, here we focus on the stable core of the concept.

What is OpenTofu and is it different from Terraform?

OpenTofu is a community governed IaC tool that follows the same idea as Terraform. Moreover, its official site says the project sits under the Linux Foundation umbrella. Also, the write, plan, and apply flow and the state logic closely resemble Terraform's.

The OpenTofu documentation says you can use the Terraform plugin SDK to write your own provider. This also points to architectural closeness between the two tools. However, the scope of compatibility can change between versions.

License and governance differences between the two are a separate debate. So we do not add our own opinion on that topic. Before you decide, read the official OpenTofu documentation and the license texts of both projects. Also, if you build a corporate environment, ask your legal team too.

For learning the concept, your choice matters little. Still, the logic stays the same. In practice, tool selection depends on your team's needs and your company rules.

Which other IaC tool categories exist?

Terraform and OpenTofu are not the only options. You can group IaC tools into three broad categories. Put simply, this split describes an approach, not a list of brands.

• General purpose declarative tools: They manage several clouds and services with one language.
• Cloud provider tools: They tie closely to one cloud and support its new features quickly.
• Tools written in a programming language: They let you describe infrastructure in a familiar language, with loops and conditions.

Which one is right? It depends on your team's skills and the clouds you use. For example, if you stay on a single cloud, the provider's own tool may be enough. On the other hand, if you manage several platforms, a general purpose tool makes more sense.

When you choose, ask a few questions. Which language does our team read comfortably? Which clouds do we use? How strong is community support? Also check whether the documentation is current, because good documentation shortens the learning time.

So we do not declare any product the best. The healthiest path is to try two tools in a small test environment and see which one your team likes.

What is infrastructure as code good for? The main benefits

So what is infrastructure as code worth to a team? The core benefit is repeatability. For example, with the same definition files, you build test, staging, and production environments in a similar way. The "it worked on my machine" problem shrinks, because you can see the differences between environments in the files.

The second benefit is version control. Because the definition files live in a system such as Git, every change has an author, a date, and a reason. As a result, returning to an earlier state after a bad change gets easier. For Git basics, see our Git and GitHub guide.

The third benefit is disaster recovery. When an environment fails, a written recipe turns a rebuild into a predictable job. However, data backup is a separate matter. In short, IaC brings back your infrastructure, not your data.

• Repeatability: The same definition produces the same environment.
• Auditability: You can trace who changed what and when.
• Speed: Creating a new environment becomes one operation.
• Collaboration: Infrastructure changes go through review as well.

A fourth benefit helps new team members. Someone who wants to understand the infrastructure can read the files instead of asking around. So knowledge moves from people's heads to a shared source. Therefore, even small teams feel that relief.

What is infrastructure as code risk-wise? The main dangers

What is infrastructure as code if not a powerful lever? IaC is powerful, so its mistakes have a big impact. For example, one wrong line can delete many resources in an environment. Specifically, approving a change without reading the plan is the most common source of this risk.

The second risk is the state file. A state that gets lost, corrupted, or exposed to unauthorized people creates both operational and security problems. The third risk is leaving secrets in code. We cover that risk in the next section.

The fourth risk is drift. If someone opens the console and changes a setting by hand, the real environment separates from your code. Then, on the next run, the tool may try to undo that difference. Therefore you need a team rule: changes go through code only.

• Never approve a change without reading the plan.
• Keep state in a secure, locked location.
• Forbid manual changes, or record them as a deliberate exception.
• Use deletion protection on critical resources.

How do you protect secrets and passwords in IaC?

Do not write passwords, API keys, or access tokens into definition files as plain text. Because these files enter version control, they stay in its history. Also, once a key lands in a repository, it can remain visible in the history even after you delete it.

Instead, the safer path is to keep secrets in a dedicated secret management system and reference them from code. Remember that the state file can also contain secret values. Terraform's documentation notes that keeping state where access control is missing can expose secrets stored in it, so read the official page on state carefully.

To create a new password, you can use our password generator. Then save the result in the secret management system, not in a definition file.

1. Scan files for secrets before they enter the repository.
2. Give each key only the lowest permission it needs.
3. Revoke and replace any key you suspect has leaked.
4. Limit access to state by person and by role.

How do IaC, configuration management, and containers differ?

These three terms often blur together, because all three sound like "setting up an environment automatically." In fact, each works at a different layer. IaC creates the infrastructure, configuration management sets up the inside of a server, and containers package the application.

The three do not compete. Many teams create servers with IaC and run the application in containers. Configuration management steps in mainly when servers need lasting settings inside.

How do you use IaC with Docker and Kubernetes?

A container packages an application together with its dependencies. We explained how containers work in our Docker guide, so we will not repeat it here. What matters is that the place where containers run must come from somewhere too.

So that is where IaC comes in. You build the foundation, such as servers, networks, and clusters, with code, and you run the application in containers. For container orchestration, meaning the management of many containers, read our article on Kubernetes versus Docker.

Example scenario: a team builds a cluster and a database for a small application. The IaC files define the cluster and the network. The team then sends the application to the cluster as a container. As a result, both the foundation and the application stay recorded and repeatable.

Where should you keep infrastructure code and how do you watch it?

Infrastructure code lives in a repository too. Some teams keep application code and infrastructure code in one repository, while others use separate ones. However, both options have pros and cons. We discuss this debate in detail in our monorepo article.

Building the infrastructure is only half of the job. Then, once it runs, you need to see what happens inside. Therefore, logs, metrics, and traces matter at this point. We cover that topic in our article on observability and OpenTelemetry.

In short, IaC is not an endpoint by itself. Together with a repository layout, a review process, and monitoring, it forms a whole.

How do modules and variables simplify IaC files?

As infrastructure grows, writing the same definition again and again becomes a problem. A module turns a repeated part into a single package. For example, you can reuse a network layout in different projects. As a result, both effort and error rate drop.

Also, a variable lets you run the same definition with different values. So you can ask for a small server in testing and a stronger one in production. The definition stays the same, and only the value changes. This approach shows the difference between environments in one place.

However, over abstracting a module is a trap. Besides, if you turn everything into a parameter, the files get hard to read. Start simple, and move to a module when repetition actually appears.

How do you separate test, staging, and production with IaC?

Many teams work with at least three environments: test, staging, and production. IaC makes it easier to build them in a similar way. Each environment comes from the same definition, and only size and access rules differ.

Example scenario: a team tries a new network rule in the test environment first. The plan output shows the expected change. Then the team applies the same change to staging, and finally to production. The mistake surfaces early, and customers feel nothing.

Keeping a separate state for each environment is a good habit. That way, for instance, an error in testing does not corrupt the record for production. You can also separate access permissions per environment. Fewer people need the right to touch production, so the impact of a wrong command stays limited.

Which security checks does IaC need?

IaC touches infrastructure through code, so security must move into code as well. The first check is the principle of least privilege. Give the account that the tool uses only the permissions it needs, because an attacker who takes that account can change your whole infrastructure.

The second check is review. Also, ask for a code review on infrastructure changes. The third check is automated scanning of the code. For example, such a scan can catch risks like a storage area left open to everyone or a network rule that is far too wide.

• Give the tool's account the lowest possible permission.
• Have a second person review each infrastructure change.
• Run an automated security scan before you release the code.
• Keep access logs and check them regularly.

For extra protection on the server side, see our Fail2ban setup guide. It does not replace IaC, but it helps protect the servers you build.

How do you get started with infrastructure as code?

First, do not draw up a giant migration plan. Start with one small resource that carries low risk. For example, a test environment or the network layout of a new project is a good first step. Coding your existing production environment comes later, however.

1. Pick one tool and read its official getting started documents.
2. Define one small resource in code and inspect the plan output.
3. Choose a secure storage location for state, with locking support.
4. Put the definition files in version control and set a review rule.
5. Move manual changes into code step by step.

Besides, keeping a record at every step builds trust in the team. Also, run your first experiment in a non live environment, where mistakes cost less. For help with server choices, our guide on VPS, cloud server, and VDS may help, since the infrastructure decision comes before the IaC decision.

When does a business actually need IaC?

First, not every business needs IaC right away. For a small company site on a single shared hosting account, the method can be extra weight. However, the benefit becomes clear if you have several environments, several people, or frequent infrastructure changes.

These signs show that the time for IaC has come:

• Remembered steps no longer suffice when you must build the same environment a second time.
• Unexplained differences appear between test and production.
• Also, only one person knows the infrastructure, and the knowledge disappears if that person leaves.
• You need a change record for audit reasons.

Example scenario: an online store adds extra servers during campaign periods. Instead of trying to recall the same steps every season, the team keeps the definition in a file. When the campaign ends, the team removes the extra resources with the same file. As a result, setup gets faster, and forgotten servers stop adding needless cost.

What is a practical IaC checklist?

The list below collects the basic items you can check when you review an IaC setup. Specifically, everything stays at the concept level. The implementation details change with your tool.

• Do all definition files live in version control, closed to unauthorized changes?
• Does state sit in a remote, locked, access limited location?
• Do you keep secrets outside the code?
• Do you review every change together with its plan output?
• Is it clear who approves lines that delete or recreate resources?
• Do you have a rule and a detection method for manual drift?
• Do you take data backups separately from IaC?
• Does more than one person on the team understand the infrastructure?

For backups, see our website backup strategy guide. If you want to refresh hosting vocabulary, the web hosting glossary will help.

What are the most common IaC mistakes?

The first mistake is leaving state in a local folder and depending on one computer. So if that computer breaks, the tool no longer recognizes the environment. The second mistake is piling everything into one file. Readability drops and the risk of a change rises.

Third, approving a change without reading the plan is a costly habit. Fourth, embedding secrets in code is a serious mistake. Fifth, you can lose knowledge when the person who wrote the code leaves. So add short explanations to the files and document the process.

Finally, testing the tool on production before you learn it is the most expensive mistake. Instead, do your learning in a separate environment. Then you do not need to fear mistakes.

Is IaC realistic for a small team?

Yes, as long as you start in measured steps. In practice, the biggest gain for small teams is that knowledge moves from people into files. When one person goes on leave or moves on, the infrastructure knowledge stays.

Also, roles matter in a small team. For example, one person can write the infrastructure code while another reviews the changes. Even a two person team can run this setup. Everyone must still learn to read the plan output.

Next, learn the core concepts first: provider, resource, state, and plan. They appear in other IaC tools as well. After that, move on to modules and variables. You also need cloud basics such as networking, identity, and access management, because IaC automates these basics but does not replace them. Without them, automation simply automates mistakes.

To see how domain records work, try our DNS lookup tool. Indeed, many infrastructure problems come down to a single DNS record.

We, Talha Aslan and our team, see that software projects need a sustainable infrastructure setup. To build a structure that fits your business, learn more about our custom software development service.

Note: This article is not legal, tax, or license advice. Check the providers' official documents for tool licenses and current features.