Choosing between CloudFormation and Terraform

CloudFormation and Terraform both implement infrastructure as code, but they solve different operational priorities. The right choice depends less on feature checklists and more on how your team deploys, governs, and recovers production systems.

If you’re deciding between in-house implementation and external support, start with the same fundamentals a DevOps team would assess: portability, rollback behavior, compliance requirements, and team operating model.

Infrastructure as code in practice

Infrastructure as code means you define desired infrastructure in version-controlled configuration, then apply changes through a repeatable pipeline.

Both Terraform and CloudFormation support this model, including declarative definitions, dependency handling, and automation-friendly workflows. Where they differ is scope and control model.

CloudFormation: AWS-native and managed

CloudFormation is AWS’s native IaC service. You define stacks in YAML or JSON and deploy through the AWS Console or CLI, including commands like aws cloudformation create-stack and aws cloudformation update-stack.

Common reasons teams choose CloudFormation:

• Broad AWS service coverage with first-party support
• Native integration with AWS service launch cadence
• Managed stack lifecycle with built-in rollback support on failed updates
• Drift detection capabilities for identifying changes outside declared templates
• Strong fit for AWS-only organizations and multi-account operations with StackSets

Trade-off: CloudFormation is tied to AWS. It is not designed for deploying infrastructure across multiple cloud providers.

Terraform: provider-agnostic and portable

Terraform is an open-source tool from HashiCorp, released in 2014. It uses HCL and supports AWS plus many third-party providers.

Common reasons teams choose Terraform:

• One workflow across AWS, Azure, GCP, and other services
• Reusable module patterns for standardizing infrastructure
• Strong ecosystem of providers and community modules
• Flexible execution in local or CI environments

Trade-off: Terraform does not provide CloudFormation-style managed rollback on failure by default. Teams need explicit recovery patterns, state discipline, and tested rollback procedures.

State and operations model

State handling is one of the biggest day-2 differences.

Terraform manages state explicitly. Small teams may start with local state, but production usage usually moves to remote backends (for example, S3 with lock coordination) to support collaboration and reduce drift.

CloudFormation manages stack state as part of AWS service operations. That can simplify operations for AWS-centric teams that want fewer moving parts in their tooling layer.

Syntax and team ergonomics

• Terraform: HCL is purpose-built for infrastructure and generally readable once teams learn its module patterns.
• CloudFormation: YAML is common and readable for many teams; JSON is supported but can become hard to maintain at scale.

Syntax preference matters, but operating constraints should outweigh language taste.

Decision framework

Pick CloudFormation when AWS-native features and managed rollback behavior matter more than cloud portability.

Pick Terraform when you need one workflow across AWS and at least one other provider.

If your organization is AWS-only today but expects near-term multi-cloud requirements, run a short proof of concept on one representative workload and evaluate migration effort before standardizing.

Final guidance

Both tools can support reliable infrastructure delivery. The better choice is the one your team can operate safely under real incident pressure, not just the one that looks cleaner in a demo.

Prioritize clear ownership, tested recovery steps, and repeatable pipeline behavior before you optimize for advanced features.