At some point you’ll want to allow others to build off of the terraform work you’ve started or maybe you want to add your terraform to a CI/CD pipeline. In order to accomplish this, you’ll need to move your Terraform statefile to a central location and update your terraform configuration settings. There’s a couple of ways to make this work and we’ll go over the pros and cons of each approach.

Lesson 4

In this post we’ll go over:

  • What’s a statefile?
  • Where to host your statefile
  • How to configure statefile in Terraform

What’s a statefile?

In Terraform, a statefile is a file which is used to store information about what has been provisioned in your current workspace (and/or directory.) Terraform uses this stored information in conjunction with the Terraform resource definitions that you’ve defined in your .tf files. When you run Terraform, it checks to make sure your .tf matches what is in your statefile. When there’s a difference between the two files, terraform will try to reconcile those differences. Examples of this include: - Terraform sees a resource definition for a droplet in a .tf file, but not in the statefile. Terraform attempts to create the droplet - Terraform sees a droplet in the statefile, but cannot find a resource definition for the droplet in the .tf file. Terraform attemps to destroy the droplet - Terraform sees a resource definition for a droplet in a .tf file and a matching droplet in the statefile. Terraform will do nothing

When you start a new terraform workspace and don’t specify a backend configuration, terraform will create a terraform.statefile file in the working directory. This will help you get up and running, but it is not ideal. Exposed secrets can live in the statefile, so you shouldn’t check it into git and other people who check out your code won’t have the statefile to help terraform reconsile the differences.

Where to host your statefile

To allow others and/or automation to use the same statefile, it needs to be hosted somewhere that multiple individuals can access it.


  • You can host your Terraform statefile in DigitalOcean’s Spaces which is modeled after AWS’s S3 storage. If you choose to use this form of hosting, you will be responsible for:
    • making sure the statefile is backed up and/or versioned. Losing a statefile is not fun and would cause a lot of headaches to get things back to where they were
    • making sure the statefile is secure. This means locking down access to the statefile and encrypting it.
    • managing the locking mechanism for the statefile so that two or more people cannot run terraform on the same workspace at the same time. Multiple runs at the same time could corrupt the statefile
  • You might want to self host because you want control of your own data or you might have security and/or compliance requirements

Self-Hosting Pros/Cons TLDR

  • Pros:
    • You control your statefile
  • Cons:
    • You are responsible for organizing, securing and locking

Terraform Cloud

In 2019, HashiCorp (the company which built Terraform) announced that they were creating a platform called Terraform Cloud to help alleviate some of the difficulty around managing statefiles. At the time of this writing, Terraform Cloud is free for up to 5 users. They’ve also mentioned that their allowed number of hosted statefiles is generous, but I haven’t seen an exact limit.

Terraform Cloud Pros/Cons TDLR

  • Pros
    • HashiCorp does a lot of the heavy lifting for you
  • Cons
    • You don’t “own” your statefile

How to configure statefile in Terraform

We’re gonna focus on using Terraform Cloud because there’s building/maintenance involved. If you’re interested in using DigitalOcean’s Spaces or S3, check out this documentation.

Create a Terraform Cloud account

  1. Go to Terraform Cloud and create a new account
  2. Once logged in, it will ask you to confirm your email address. Go ahead, I’ll wait
  3. When you click the validation link in your Terraform Cloud validation email, it will take you a screen to Create a new organization. Give it a name, then press Create organization
  4. You’ll now see a Create a new Workspace page and given three options. It recommends version control workfolw, but right now we’re just interested in statefile hosting. Choose CLI-driven workflow
  5. At the Create a new Workspace screen, enter tf-tutorial, then press Create workspace
  6. Go to the Settings menu on the top right corner, select General
  7. Change the Execution Mode to local then press Save settings, this means terraform cloud will only be used for statefile storage. If you leave it on Remote, Terraform Cloud will need credentials for your cloud provider to build/destroy on your behalf.
  8. Go back to the Runs tab, here you will find example code to paste into your provider.tf file like the text below:
terraform {
  backend "remote" {
    organization = "CashiHorp"

    workspaces {
      name = "tf-tutorial"

Note: Don’t copy the text above, copy the Example Code shown in the Terraform Cloud interface.

Workspace Naming Conventions

You will more than likely have multiple/many workspaces. Be sure to include environment/stage information by doing things like appending -prod to the end of the workspace. Think about what makes sense to you and your team. Try out different naming schemes prior to deciding because it might come back to bite you later.

Create an API key to access Terraform Cloud

  1. Go to User Settings/Tokens
  2. Press Create an API Token
  3. Enter a description like “My Dell Optiplex GX260”, then press Create API token
  4. Open your terminal and run terraform login
  5. Enter yes when prompted to proceed
  6. Paste the token you created in steps 1-3, then press enter
    • You should recieve a confirmation that says your credentails were stored in /root/.terraform.d/credentials.tfrc.json

Configuring provider.tf

  1. Create a new folder on your computer called tf-tutorial
  2. Create provider.tf file in the tf-tutorial folder
  3. Copy the Example code provided to you in the Terraform Cloud “Runs” page into your provider.tf
  4. Now add your cloud provider to the mix. We’ll be using DigitalOcean which will look like this:


terraform {
  required_providers {
    digitalocean = {
      source = "digitalocean/digitalocean"
      version = "~> 2.0.0"
  required_version = "~> 0.13"

variable "do_token" {
  description = "Digital Ocean auth token"

provider "digitalocean" {
  token = var.do_token

Note: Taccoform Tutorial Series - Part I has information on how to set up a DigitalOcean account and API token

  1. Now you should be ready to run Terraform commands, start with terraform init
$ terraform init

Initializing the backend...

Successfully configured the backend "remote"! Terraform will automatically
use this backend unless the backend configuration changes.

Initializing provider plugins...
- Finding digitalocean/digitalocean versions matching "~> 2.0.0"...
- Installing digitalocean/digitalocean v2.0.2...
- Installed digitalocean/digitalocean v2.0.2 (signed by a HashiCorp partner, key ID F82037E524B9C0E8)

Partner and community providers are signed by their developers.
If you'd like to know more about provider signing, you can read about it here:

Terraform has been successfully initialized!

You may now begin working with Terraform. Try running "terraform plan" to see
any changes that are required for your infrastructure. All Terraform commands
should now work.

If you ever set or change modules or backend configuration for Terraform,
rerun this command to reinitialize your working directory. If you forget, other
commands will detect it and remind you to do so if necessary.

Testing Your Terraform Cloud Configuration

  1. Create a droplet.tf file in the tf-tutorial folder with the following in it:


resource "digitalocean_droplet" "web" {
  image  = "ubuntu-20-04-x64"
  name   = "web-test"
  region = "sfo2"
  size   = "s-1vcpu-1gb"
  1. Run terraform apply
  2. Enter your DigitalOcean token when prompted
  3. Type yes when prompted and press enter
  4. After the apply has completed, go back to the tf-tutorial workspace in Terraform Cloud and go to the States tab
  5. You will see a new state has been created. Click on the state and you’ll be able to see the contents of the statefile
  6. Once you’re ready, you can run terraform destroy to remove the droplet you created.
  7. You can also remove the tf-tutorial workspace in Terraform Cloud

In Review

You now have Terraform Cloud doing the heavy lifting for storing, encrypting, and versioning your Terraform statefiles. Even better, you can add more people to your Terraform Cloud organization to collaborate on terraform work. You can also start incorporating CI/CD workflows into your terraform projects.

Check out the next post which will cover defining, using, and organizing variables.

As always, feel free to reach out on twitter via @taccoform for questions and/or feedback on this post