Infrastructure as Code: Terraform Best Practices

The Power of Infrastructure as Code

Infrastructure as Code (IaC) transforms infrastructure management from manual, error-prone processes to automated, version-controlled workflows. Terraform, HashiCorp's open-source IaC tool, has become the industry standard for managing cloud infrastructure across multiple providers.

This guide covers battle-tested practices for writing maintainable, scalable Terraform code that teams can collaborate on effectively.

Fundamental Principles

Declarative, Not Imperative

With IaC, your infrastructure is documented, version-controlled, and reproducible. Manual changes become anomalies, not the norm.

State Management

Terraform tracks infrastructure state. Proper state management is critical:

• Remote state - Store state in S3, Azure Blob, or Terraform Cloud
• State locking - Prevent concurrent modifications using DynamoDB or similar
• Encryption - Encrypt state files (they contain sensitive data)
• State isolation - Separate state files for different environments

Project Structure

Module Design

Create reusable modules for common patterns:

• One module per logical component (VPC, database cluster, application)
• Clear input variables with descriptions and validation
• Useful outputs for consumption by other modules
• Sensible defaults where appropriate

Writing Quality Terraform Code

Use Variables Effectively

Resource Naming Conventions

• Use descriptive, consistent names
• Include environment in resource names
• Follow cloud provider naming restrictions
• Use underscores for Terraform identifiers
• Use hyphens for cloud resource names

State Management Best Practices

Workspace Strategy

Use workspaces judiciously:

• Single environment - Workspaces for temporary testing
• Multiple environments - Separate state files preferred over workspaces
• Shared modules - Same code, different state per environment

Security and Secrets Management

Never Commit Secrets

Keep secrets out of your code:

• Use AWS Secrets Manager, Azure Key Vault, or HashiCorp Vault
• Reference secrets via data sources
• Use environment variables for Terraform Cloud tokens
• Scan code with tools like tfsec and Checkov

Principle of Least Privilege

Grant minimal necessary permissions:

• Separate IAM roles for Terraform execution
• Use role assumption for cross-account access
• Implement SCPs and permission boundaries
• Regular audit of Terraform permissions

Dependency Management

Explicit Dependencies

Terraform infers most dependencies automatically, but sometimes you need explicit ones:

Count and For_Each

Create multiple similar resources elegantly:

Testing and Validation

Pre-commit Checks

Catch issues before they reach version control:

• terraform fmt - Format code consistently
• terraform validate - Check syntax and configuration
• tflint - Detect errors and enforce best practices
• tfsec - Security scanning

Automated Testing

Test infrastructure code like application code:

• Terratest - Go-based testing framework
• Kitchen-Terraform - Integration testing
• Terraform Compliance - Policy as code testing

CI/CD Integration

Automated Workflows

Integrate Terraform into your CI/CD pipeline:

1. PR Creation - Run plan, post results as comment
2. PR Approval - Require security scans to pass
3. Merge to Main - Apply changes to development
4. Tag/Release - Apply to staging/production

Performance Optimization

Reduce Plan Time

Large infrastructures can have slow plan times:

• Target specific resources: terraform plan -target=module.networking
• Use -refresh=false when state is known to be current
• Break large configurations into smaller, focused modules
• Use -parallelism flag to control concurrent operations

State File Optimization

Keep state files manageable:

• Split large monolithic state into smaller state files
• One state file per logical environment or application
• Use terraform state mv to reorganize
• Periodically clean up unused resources

Common Pitfalls and Solutions

Pitfall: Manual Changes

Problem: Someone modifies infrastructure manually, causing state drift.

Solution: Regular terraform plan runs, drift detection alerts, and culture of "everything through code."

Pitfall: Circular Dependencies

Problem: Resources depend on each other circularly.

Solution: Redesign architecture to eliminate cycles, use data sources to break cycles.

Pitfall: Provider Version Lock

Problem: Provider updates break existing code.

Solution: Lock provider versions explicitly:

Advanced Patterns

Module Composition

Build complex infrastructure from simple modules:

Dynamic Blocks

Generate repeated nested blocks programmatically:

Documentation and Collaboration

Code Documentation

• Describe module purpose in README.md
• Document all variables with descriptions
• Explain non-obvious design decisions in comments
• Use terraform-docs to generate documentation

Change Management

Establish clear processes:

• All changes through pull requests
• Required approvals for production changes
• Plan output reviewed before apply
• Scheduled maintenance windows for significant changes

Monitoring and Observability

Monitor your IaC operations:

• Track Terraform run success/failure rates
• Alert on unexpected state changes
• Monitor drift detection results
• Track time-to-apply metrics
• Audit who made what changes when

Conclusion

Terraform enables teams to manage infrastructure at scale with confidence. By following these best practices—modular design, proper state management, comprehensive testing, and automated workflows—you can build reliable, maintainable infrastructure as code.

Key takeaways:

• Treat infrastructure code with the same rigor as application code
• Use modules to promote reusability and maintainability
• Implement comprehensive testing and validation
• Automate everything through CI/CD
• Never commit secrets or manual changes

Ready to level up your Infrastructure as Code practice? Our DevOps engineers can help you design and implement Terraform workflows that scale with your organization.