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Configure Terraform Backend

In the previous steps, we've configured the vpc-flow-logs-bucket and vpc Terraform components to be provisioned into three AWS accounts (dev, staging, prod) in the two AWS regions (us-east-2 and us-west-2).

By default, Terraform will use a backend called local, which stores Terraform state on the local filesystem, locks that state using system APIs, and performs operations locally. For any scenario beyond a basic playground setup, such as staging or production environments, we'll provision and configure the Terraform s3 backend.

Terraform Local Backend​

Terraform's local backend is designed for development and testing purposes and is generally not recommended for production use. There are several reasons why using the local backend in a production environment may not be suitable:

  • State Management: The local backend stores the Terraform state file on the local file system. In a production environment, it's crucial to have a robust and scalable solution for managing the Terraform state. Storing state locally can lead to issues with collaboration, concurrency, and consistency.

  • Concurrency and Locking: When multiple users or automation processes are working with Terraform concurrently, it's essential to ensure that only one process can modify the infrastructure at a time. The local backend lacks built-in support for locking mechanisms that prevent multiple Terraform instances from modifying the state simultaneously. This can lead to race conditions and conflicting changes.

  • Collaboration: In a production environment with multiple team members, it's important to have a centralized and shared state. The local backend does not provide a way to easily share the state across different team members or systems. A remote backend, such as Amazon S3, Azure Storage, or HashiCorp Consul, is more suitable for collaboration.

  • Durability and Backup: The local backend does not provide durability or backup features. If the machine where Terraform is run experiences issues, there's a risk of losing the state file, leading to potential data loss. Remote backends offer better durability and often provide features for versioning and backup.

  • Remote Execution and Automation: In production, it's common to use Terraform in automated workflows, such as continuous integration/continuous deployment (CI/CD) pipelines. Remote backends are better suited for these scenarios, allowing for seamless integration with automation tools and supporting the deployment of infrastructure as code in a reliable and controlled manner.

To address these concerns, it's recommended to use one of the supported remote backends, such as Amazon S3, Azure Storage, Google Cloud Storage, HashiCorp Consul, or Terraform Cloud, for production environments. Remote backends provide better scalability, collaboration support, and durability, making them more suitable for managing infrastructure at scale in production environments.

Terraform S3 Backend​

Terraform's S3 backend is a popular remote backend for storing Terraform state files in an Amazon Simple Storage Service (S3) bucket. Using S3 as a backend offers several advantages over local backends, particularly in production environments. Here's an overview of the key features and benefits of using the Terraform S3 backend:

  • Remote State Storage: The Terraform state file is stored remotely in an S3 bucket. This allows multiple users and Terraform instances to access and manage the same state file, promoting collaboration and consistency across deployments.

  • Concurrency and Locking: S3 backend supports state file locking, which prevents multiple Terraform instances from modifying the state file simultaneously. This helps avoid conflicts and ensures that changes are applied in a coordinated manner, especially in multi-user or automated environments.

  • Durability and Versioning: S3 provides high durability for object storage, and it automatically replicates data across multiple availability zones. Additionally, versioning can be enabled on the S3 bucket, allowing you to track changes to the state file over time. This enhances data integrity and provides a safety net in case of accidental changes or deletions.

  • Access Control and Security: S3 supports fine-grained access control policies, allowing you to restrict access to the state file based on AWS Identity and Access Management (IAM) roles and policies. This helps ensure that only authorized users or processes can read or modify the Terraform state.

  • Integration with AWS Features: The S3 backend integrates well with other AWS services. For example, you can use AWS Key Management Service (KMS) for server-side encryption of the state file, and you can leverage AWS Identity and Access Management (IAM) roles for secure access to the S3 bucket.

  • Terraform Remote Operations: The S3 backend can be used in conjunction with Terraform Remote Operations, allowing you to run Terraform commands remotely while keeping the state in S3. This is useful for scenarios where the Terraform client and the infrastructure being managed are separated.

To configure Terraform to use an S3 backend, you typically provide the S3 bucket name and an optional key prefix in your Terraform configuration. Here's a simplified example:

backend.tf

terraform {
  backend "s3" {
    acl            = "bucket-owner-full-control"
    bucket         = "your-s3-bucket-name"
    key            = "path/to/terraform.tfstate"
    region         = "your-aws-region"
    encrypt        = true
    dynamodb_table = "terraform_locks"
  }
}

In the example, terraform_locks is a DynamoDB table used for state locking. DynamoDB is recommended for locking when using the S3 backend to ensure safe concurrent access.

Provision Terraform S3 Backend​

Before using Terraform S3 backend, a backend S3 bucket and DynamoDB table need to be provisioned.

You can provision them using the tfstate-backend Terraform module and tfstate-backend Terraform component (root module).

Note that the tfstate-backend Terraform component can be added to the components/terraform folder, the configuration for the component can be added to the stacks, and the component itself can be provisioned with Atmos.

Here's an example of an Atmos manifest to configure the tfstate-backend Terraform component:

stacks/catalog/tfstate-backend/defaults.yaml

components:
  terraform:
    tfstate-backend:
      vars:
        enable_server_side_encryption: true
        enabled: true
        force_destroy: false
        name: tfstate
        prevent_unencrypted_uploads: true

Configure Terraform S3 Backend​

Once the S3 bucket and DynamoDB table are provisioned, you can start using them to store Terraform state for the Terraform components. There are two ways of doing this:

  • Manually create backend.tf file in each component's folder with the following content:

    backend.tf

    terraform {
      backend "s3" {
        acl                  = "bucket-owner-full-control"
        bucket               = "your-s3-bucket-name"
        dynamodb_table       = "your-dynamodb-table-name"
        encrypt              = true
        key                  = "terraform.tfstate"
        region               = "your-aws-region"
        role_arn             = "arn:aws:iam::<your account ID>:role/<IAM Role with permissions to access the Terraform backend>"
        workspace_key_prefix = "<component name, e.g. `vpc` or `vpc-flow-logs-bucket`>"
      }
    }

  • Configure Terraform S3 backend with Atmos to automatically generate a backend file for each Atmos component. This is the recommended way of configuring Terraform state backend since it offers many advantages and will save you from manually creating a backend configuration file for each component

Configure Terraform S3 Backend with Atmos​

Configuring Terraform S3 backend with Atmos consists of the three steps:

  • Set auto_generate_backend_file to true in the atmos.yaml CLI config file in the components.terraform section:

    atmos.yaml

    components:
      terraform:
        # Can also be set using 'ATMOS_COMPONENTS_TERRAFORM_AUTO_GENERATE_BACKEND_FILE' ENV var, or '--auto-generate-backend-file' command-line argument
        auto_generate_backend_file: true

    Refer to Quick Start: Configure CLI and CLI Configuration for more details.

  • Configure the S3 backend in one of the _defaults.yaml manifests. You can configure it for the entire Organization, or per OU/tenant, or per region, or per account.

    note

    The _defaults.yaml manifests contain the default settings for Organizations, Organizational Units and accounts.

    To configure the S3 backend for the entire Organization, add the following config in stacks/orgs/acme/_defaults.yaml:

    stacks/orgs/acme/_defaults.yaml

    terraform:
      backend_type: s3
      backend:
        s3:
          acl: "bucket-owner-full-control"
          encrypt: true
          bucket: "your-s3-bucket-name"
          dynamodb_table: "your-dynamodb-table-name"
          key: "terraform.tfstate"
          region: "your-aws-region"
          role_arn: "arn:aws:iam::<your account ID>:role/<IAM Role with permissions to access the Terraform backend>"

  • (This step is optional) For each component, you can add workspace_key_prefix similar to the following:

    stacks/catalog/vpc.yaml

    components:
      terraform:
        # `vpc` is the Atmos component name
        vpc:
          # Optional backend configuration for the component
          backend:
            s3:
              workspace_key_prefix: vpc
          metadata:
            # Point to the Terraform component
            component: vpc
          settings: {}
          vars: {}
          env: {}

    Note that this is optional. If you don’t add backend.s3.workspace_key_prefix to the component manifest, the Atmos component name will be used automatically (which, in this example, is vpc). / (slash) in the Atmos component name will be replaced with - (dash).

    We usually don’t specify workspace_key_prefix for each component and let Atmos use the component name as workspace_key_prefix.

Once all the above is configured, when you run the commands atmos terraform plan vpc -s <stack> or atmos terraform apply vpc -s <stack>, before executing the Terraform commands, Atmos will deep-merge the backend configurations from the _defaults.yaml manifest and from the component itself, and will generate a backend config JSON file backend.tf.json in the component's folder, similar to the following example:

backend.tf.json

{
  "terraform": {
    "backend": {
      "s3": {
        "acl": "bucket-owner-full-control",
        "bucket": "your-s3-bucket-name",
        "dynamodb_table": "your-dynamodb-table-name",
        "encrypt": true,
        "key": "terraform.tfstate",
        "region": "your-aws-region",
        "role_arn": "arn:aws:iam::<your account ID>:role/<IAM Role with permissions to access the Terraform backend>",
        "workspace_key_prefix": "vpc"
      }
    }
  }
}

You can also generate the backend configuration file for a component in a stack by executing the command atmos terraform generate backend. Or generate the backend configuration files for all components by executing the command atmos terraform generate backends.

Terraform Backend Inheritance​

In the previous section, we configured the S3 backend for the entire Organization by adding the terraform.backend.s3 section to the stacks/orgs/acme/_defaults.yaml stack manifest. The same backend configuration (S3 bucket, DynamoDB table, and IAM role) will be used for all OUs, accounts and regions.

Suppose that for security and audit reasons, you want to use different Terraform backends for the dev, staging and prod accounts. Each account needs to have a separate S3 bucket, DynamoDB table, and IAM role with different permissions (for example, the development Team should be able to access the Terraform backend only in the dev account, but not in staging and prod).

Atmos supports this use-case by using deep-merging of stack manifests, Imports and Inheritance, which makes the backend configuration reusable and DRY.

We'll split the backend config between the Organization and the accounts.

Add the following config to the Organization stack manifest in stacks/orgs/acme/_defaults.yaml:

stacks/orgs/acme/_defaults.yaml

terraform:
  backend_type: s3
  backend:
    s3:
      acl: "bucket-owner-full-control"
      encrypt: true
      key: "terraform.tfstate"
      region: "your-aws-region"

Add the following config to the dev stack manifest in stacks/orgs/acme/plat/dev/_defaults.yaml:

stacks/orgs/acme/plat/dev/_defaults.yaml

terraform:
  backend_type: s3
  backend:
    s3:
      bucket: "your-dev-s3-bucket-name"
      dynamodb_table: "your-dev-dynamodb-table-name"
      role_arn: "<IAM Role with permissions to access the `dev` Terraform backend>"

Add the following config to the staging stack manifest in stacks/orgs/acme/plat/staging/_defaults.yaml:

stacks/orgs/acme/plat/staging/_defaults.yaml

terraform:
  backend_type: s3
  backend:
    s3:
      bucket: "your-staging-s3-bucket-name"
      dynamodb_table: "your-staging-dynamodb-table-name"
      role_arn: "<IAM Role with permissions to access the `staging` Terraform backend>"

Add the following config to the prod stack manifest in stacks/orgs/acme/plat/prod/_defaults.yaml:

stacks/orgs/acme/plat/prod/_defaults.yaml

terraform:
  backend_type: s3
  backend:
    s3:
      bucket: "your-prod-s3-bucket-name"
      dynamodb_table: "your-prod-dynamodb-table-name"
      role_arn: "<IAM Role with permissions to access the `prod` Terraform backend>"

When you provision the vpc component into the dev account (by executing the command atmos terraform apply vpc -s plat-ue2-dev), Atmos will deep-merge the backend configuration from the Organization-level manifest with the configuration from the dev manifest, and will automatically add workspace_key_prefix for the component, generating the following final deep-merged backend config for the vpc component in the dev account:

backend.tf.json

{
  "terraform": {
    "backend": {
      "s3": {
        "acl": "bucket-owner-full-control",
        "bucket": "your-dev-s3-bucket-name",
        "dynamodb_table": "your-dev-dynamodb-table-name",
        "encrypt": true,
        "key": "terraform.tfstate",
        "region": "your-aws-region",
        "role_arn": "<IAM Role with permissions to access the `dev` Terraform backend>",
        "workspace_key_prefix": "vpc"
      }
    }
  }
}

In the same way, you can create different Terraform backends per Organizational Unit, per region, per account (or a group of accounts, e.g. prod and non-prod), or even per component or a set of components (e.g. root-level components like account and IAM roles can have a separate backend), and then configure parts of the backend config in the corresponding Atmos stack manifests. Atmos will deep-merge all the parts from the different scopes and generate the final backend config for the components in the stacks.

Terraform Backend with Multiple Component Instances​

We mentioned before that you can configure the Terraform backend for the components manually (by creating a file backend.tf in each Terraform component's folder), or you can set up Atmos to generate the backend configuration for each component in the stacks automatically. While auto-generating the backend config file is helpful and saves you from creating the backend files for each component, it becomes a requirement when you provision multiple instances of a Terraform component into the same environment (same account and region).

You can provision more than one instance of the same Terraform component (with the same or different settings) into the same environment by defining many Atmos components that provide configuration for the Terraform component.

tip

For more information on configuring and provision multiple instances of a Terraform component, refer to Multiple Component Instances Atmos Design Patterns

For example, the following config shows how to define two Atmos components, vpc/1 and vpc/2, which both point to the same Terraform component vpc:

stack.yaml

import:
  # Import the defaults for all VPC components
  - catalog/vpc/defaults

components:
  terraform:
    # Atmos component `vpc/1`
    vpc/1:
      metadata:
        # Point to the Terraform component in `components/terraform/vpc`
        component: vpc
        # Inherit the defaults for all VPC components
        inherits:
          - vpc/defaults
      # Define variables specific to this `vpc/1` component
      vars:
        name: vpc-1
        ipv4_primary_cidr_block: 10.9.0.0/18
      # Optional backend configuration for the component
      # If not specified, the Atmos component name `vpc/1` will be used (`/` will be replaced with `-`)
      backend:
        s3:
          workspace_key_prefix: vpc-1

    # Atmos component `vpc/2`
    vpc/2:
      metadata:
        # Point to the Terraform component in `components/terraform/vpc`
        component: vpc
        # Inherit the defaults for all VPC components
        inherits:
          - vpc/defaults
      # Define variables specific to this `vpc/2` component
      vars:
        name: vpc-2
        ipv4_primary_cidr_block: 10.10.0.0/18
      # Optional backend configuration for the component
      # If not specified, the Atmos component name `vpc/2` will be used (`/` will be replaced with `-`)
      backend:
        s3:
          workspace_key_prefix: vpc-2

If we manually create a backend.tf file for the vpc Terraform component in the components/terraform/vpc folder using workspace_key_prefix: "vpc", then both vpc/1 and vpc/2 Atmos components will use the same workspace_key_prefix, and they will not function correctly.

On the other hand, if we configure Atmos to auto-generate the backend config file, then each component will have a different workspace_key_prefix auto-generated by Atmos by using the Atmos component name (or you can override this behavior by specifying workspace_key_prefix for each component in the component manifest in the backend.s3.workspace_key_prefix section).

For example, when the command atmos terraform apply vpc/1 -s plat-ue2-dev is executed, the following backend.tf.json file is generated in the components/terraform/vpc folder:

backend.tf.json

{
  "terraform": {
    "backend": {
      "s3": {
        "acl": "bucket-owner-full-control",
        "bucket": "your-dev-s3-bucket-name",
        "dynamodb_table": "your-dev-dynamodb-table-name",
        "encrypt": true,
        "key": "terraform.tfstate",
        "region": "your-aws-region",
        "role_arn": "<IAM Role with permissions to access the `dev` Terraform backend>",
        "workspace_key_prefix": "vpc-1"
      }
    }
  }
}

Similarly, when the command atmos terraform apply vpc/2 -s plat-ue2-dev is executed, the following backend.tf.json file is generated in the components/terraform/vpc folder:

backend.tf.json

{
  "terraform": {
    "backend": {
      "s3": {
        "acl": "bucket-owner-full-control",
        "bucket": "your-dev-s3-bucket-name",
        "dynamodb_table": "your-dev-dynamodb-table-name",
        "encrypt": true,
        "key": "terraform.tfstate",
        "region": "your-aws-region",
        "role_arn": "<IAM Role with permissions to access the `dev` Terraform backend>",
        "workspace_key_prefix": "vpc-2"
      }
    }
  }
}

The generated files will have different workspace_key_prefix attribute auto-generated by Atmos.

For this reason, configuring Atmos to auto-generate the backend configuration for the components in the stacks is recommended.