diff --git a/.gitignore b/.gitignore
new file mode 100644
index 0000000..e41de5d
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,165 @@
+# Byte-compiled / optimized / DLL files
+__pycache__/
+*.py[cod]
+*$py.class
+
+# C extensions
+*.so
+
+# Distribution / packaging
+.Python
+build/
+develop-eggs/
+dist/
+downloads/
+eggs/
+.eggs/
+lib/
+lib64/
+parts/
+sdist/
+var/
+wheels/
+share/python-wheels/
+*.egg-info/
+.installed.cfg
+*.egg
+MANIFEST
+
+# PyInstaller
+#  Usually these files are written by a python script from a template
+#  before PyInstaller builds the exe, so as to inject date/other infos into it.
+*.manifest
+*.spec
+
+# Installer logs
+pip-log.txt
+pip-delete-this-directory.txt
+
+# Unit test / coverage reports
+htmlcov/
+.tox/
+.nox/
+.coverage
+.coverage.*
+.cache
+nosetests.xml
+coverage.xml
+*.cover
+*.py,cover
+.hypothesis/
+.pytest_cache/
+cover/
+
+# Translations
+*.mo
+*.pot
+
+# Django stuff:
+*.log
+local_settings.py
+db.sqlite3
+db.sqlite3-journal
+
+# Flask stuff:
+instance/
+.webassets-cache
+
+# Scrapy stuff:
+.scrapy
+
+# Sphinx documentation
+docs/_build/
+
+# PyBuilder
+.pybuilder/
+target/
+
+# Jupyter Notebook
+.ipynb_checkpoints
+
+# IPython
+profile_default/
+ipython_config.py
+
+# pyenv
+#   For a library or package, you might want to ignore these files since the code is
+#   intended to run in multiple environments; otherwise, check them in:
+# .python-version
+
+# pipenv
+#   According to pypa/pipenv#598, it is recommended to include Pipfile.lock in version control.
+#   However, in case of collaboration, if having platform-specific dependencies or dependencies
+#   having no cross-platform support, pipenv may install dependencies that don't work, or not
+#   install all needed dependencies.
+#Pipfile.lock
+
+# poetry
+#   Similar to Pipfile.lock, it is generally recommended to include poetry.lock in version control.
+#   This is especially recommended for binary packages to ensure reproducibility, and is more
+#   commonly ignored for libraries.
+#   https://python-poetry.org/docs/basic-usage/#commit-your-poetrylock-file-to-version-control
+#poetry.lock
+
+# pdm
+#   Similar to Pipfile.lock, it is generally recommended to include pdm.lock in version control.
+#pdm.lock
+#   pdm stores project-wide configurations in .pdm.toml, but it is recommended to not include it
+#   in version control.
+#   https://pdm.fming.dev/latest/usage/project/#working-with-version-control
+.pdm.toml
+.pdm-python
+.pdm-build/
+
+# PEP 582; used by e.g. github.com/David-OConnor/pyflow and github.com/pdm-project/pdm
+__pypackages__/
+
+# Celery stuff
+celerybeat-schedule
+celerybeat.pid
+
+# SageMath parsed files
+*.sage.py
+
+# Environments
+.env
+.venv
+env/
+venv/
+ENV/
+env.bak/
+venv.bak/
+
+# Spyder project settings
+.spyderproject
+.spyproject
+
+# Rope project settings
+.ropeproject
+
+# mkdocs documentation
+/site
+
+# mypy
+.mypy_cache/
+.dmypy.json
+dmypy.json
+
+# Pyre type checker
+.pyre/
+
+# pytype static type analyzer
+.pytype/
+
+# Cython debug symbols
+cython_debug/
+
+# PyCharm
+#  JetBrains specific template is maintained in a separate JetBrains.gitignore that can
+#  be found at https://github.com/github/gitignore/blob/main/Global/JetBrains.gitignore
+#  and can be added to the global gitignore or merged into this file.  For a more nuclear
+#  option (not recommended) you can uncomment the following to ignore the entire idea folder.
+#.idea/
+
+
+.DS_Store
\ No newline at end of file
diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 0000000..e6de526
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,5 @@
+FROM python:3.13-slim
+WORKDIR /app
+COPY . .
+RUN pip install --no-cache-dir -r requirements.txt
+CMD ["uvicorn", "app.main:app", "--host", "0.0.0.0", "--port", "8000"]
\ No newline at end of file
diff --git a/README.md b/README.md
index 3145d38..e9758fa 100644
--- a/README.md
+++ b/README.md
@@ -1,31 +1,83 @@
-# Instructions
+# Server Inventory Manager
 
-You are developing an inventory management software solution for a cloud services company that provisions servers in multiple data centers. You must build a CRUD app for tracking the state of all the servers. 
+A CRUD application to manage server inventory across data centers. Built with FastAPI and PostgreSQL using raw SQL.
 
-Deliverables:
-- PR to https://github.com/Mathpix/hiring-challenge-devops-python that includes:
-- API code
-- CLI code
-- pytest test suite
-- Working Docker Compose stack
+## Features
+- REST API for Server management.
+- CLI tool.
+- Raw SQL implementation.
+- Hostname uniqueness enforcement.
+- IP address and State validation.
 
-Short API.md on how to run everything, also a short API and CLI spec
+## Prerequisites
+- Docker & Docker Compose
+- Python 3.11+ (if running CLI locally)
 
-Required endpoints:
-- POST /servers → create a server
-- GET /servers → list all servers
-- GET /servers/{id} → get one server
-- PUT /servers/{id} → update server
-- DELETE /servers/{id} → delete server
+## Project Structure
 
-Requirements:
-- Use FastAPI or Flask
-- Store data in PostgreSQL
-- Use raw SQL
+```text
+├── app
+│   ├── database.py   # Raw SQL wrapper
+│   ├── main.py       # API Endpoints
+│   └── models.py     # Pydantic schemas
+├── cli
+│   └── main.py       # CLI Tool
+├── tests
+│   └── test_api.py   # Pytest suite
+├── docker-compose.yml
+└── Dockerfile
+```
 
-Validate that:
-- hostname is unique
-- IP address looks like an IP
+## How to Run
 
-State is one of: active, offline, retired
+### 1. Start the Application
+Build and start the API and Database containers:
 
+```bash
+docker-compose up --build
+```
+
+The API will be accessible at: http://localhost:8000
+Automatic API Docs (Swagger UI): http://localhost:8000/docs
+
+### 2. Run the Test Suite
+Execute the pytest suite inside the running container to verify functionality:
+
+```bash
+docker-compose run --rm api pytest -v
+```
+
+### CLI Usage
+You can run the CLI tool from your local machine (requires Python installed) or enter the container to run it.
+
+Option A: Running Locally (Recommended)
+#### 1. Install Dependencies:
+```bash
+pip install -r requirements.txt
+```
+
+#### 2. Commands:
+- Create a server
+```bash
+python cli/main.py create "srv-node-01" "192.168.1.50" --state active
+```
+- List all servers
+```bash
+python cli/main.py list
+```
+- Get a single server
+```bash
+# Replace 1 with the actual ID
+python cli/main.py get 1
+```
+- Update a server
+```bash
+# Change state to offline
+python cli/main.py update 1 --state offline
+# Change IP address
+python cli/main.py update 1 --ip "192.168.1.11"
+```
+- Delete a server
+```bash
+python cli/main.py delete 1
+```
\ No newline at end of file
diff --git a/app/__init__.py b/app/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/app/database.py b/app/database.py
new file mode 100644
index 0000000..7dabb25
--- /dev/null
+++ b/app/database.py
@@ -0,0 +1,44 @@
+import os
+import asyncpg
+from typing import List, Optional, Any
+
+DATABASE_URL = os.getenv("DATABASE_URL", "postgres://postgres:postgres@localhost:5432/postgres")
+
+class Database:
+    def __init__(self):
+        self.pool = None
+
+    async def connect(self):
+        self.pool = await asyncpg.create_pool(DATABASE_URL)
+        await self.init_db()
+
+    async def close(self):
+        await self.pool.close()
+
+    async def init_db(self):
+        query = """
+        CREATE TABLE IF NOT EXISTS servers (
+            id SERIAL PRIMARY KEY,
+            hostname VARCHAR(255) UNIQUE NOT NULL,
+            ip_address VARCHAR(45) NOT NULL,
+            state VARCHAR(20) NOT NULL CHECK (state IN ('active', 'offline', 'retired'))
+        );
+        """
+        async with self.pool.acquire() as connection:
+            await connection.execute(query)
+
+    async def fetch_all(self, query: str, *args) -> List[dict]:
+        async with self.pool.acquire() as connection:
+            rows = await connection.fetch(query, *args)
+            return [dict(row) for row in rows]
+
+    async def fetch_one(self, query: str, *args) -> Optional[dict]:
+        async with self.pool.acquire() as connection:
+            row = await connection.fetchrow(query, *args)
+            return dict(row) if row else None
+
+    async def execute(self, query: str, *args) -> Any:
+        async with self.pool.acquire() as connection:
+            return await connection.fetchval(query, *args)
+
+db = Database()
diff --git a/app/main.py b/app/main.py
new file mode 100644
index 0000000..a242584
--- /dev/null
+++ b/app/main.py
@@ -0,0 +1,99 @@
+from contextlib import asynccontextmanager
+from fastapi import FastAPI, HTTPException, status, Query
+from asyncpg.exceptions import UniqueViolationError
+from app.database import db
+from app.models import ServerCreate, ServerUpdate, ServerResponse
+
+@asynccontextmanager
+async def lifespan(_: FastAPI):
+    await db.connect()
+    yield
+    await db.close()
+
+app = FastAPI(title="Server Inventory API", lifespan=lifespan)
+
+@app.post("/server", response_model=ServerResponse, status_code=status.HTTP_201_CREATED)
+async def create_server(server: ServerCreate):
+    query = """
+        INSERT INTO servers (hostname, ip_address, state)
+        VALUES ($1, $2, $3)
+        RETURNING id, hostname, ip_address, state;
+    """
+    try:
+        row = await db.fetch_one(
+            query, 
+            server.hostname, 
+            str(server.ip_address), 
+            server.state
+        )
+        return row
+    except UniqueViolationError:
+        raise HTTPException(
+            status_code=400, 
+            detail=f"Server with hostname '{server.hostname}' already exists."
+        )
+
+@app.get("/server/{server_id}", response_model=ServerResponse)
+async def get_server(server_id: int):
+    query = "SELECT id, hostname, ip_address, state FROM servers WHERE id = $1;"
+    row = await db.fetch_one(query, server_id)
+    if not row:
+        raise HTTPException(status_code=404, detail="Server not found")
+    return row
+
+@app.put("/server/{server_id}", response_model=ServerResponse)
+async def update_server(server_id: int, server: ServerUpdate):
+    check_query = "SELECT id FROM servers WHERE id = $1;"
+    if not await db.fetch_one(check_query, server_id):
+        raise HTTPException(status_code=404, detail="Server not found")
+
+    fields = []
+    values = []
+    idx = 1
+    
+    if server.hostname is not None:
+        fields.append(f"hostname = ${idx}")
+        values.append(server.hostname)
+        idx += 1
+    if server.ip_address is not None:
+        fields.append(f"ip_address = ${idx}")
+        values.append(str(server.ip_address))
+        idx += 1
+    if server.state is not None:
+        fields.append(f"state = ${idx}")
+        values.append(server.state)
+        idx += 1
+        
+    if not fields:
+        raise HTTPException(status_code=400, detail="No fields provided for update")
+        
+    values.append(server_id)
+    query = f"""
+        UPDATE servers 
+        SET {', '.join(fields)}
+        WHERE id = ${idx}
+        RETURNING id, hostname, ip_address, state;
+    """
+    
+    try:
+        row = await db.fetch_one(query, *values)
+        return row
+    except UniqueViolationError:
+        raise HTTPException(status_code=400, detail="Hostname already taken")
+
+@app.delete("/server/{server_id}", status_code=status.HTTP_204_NO_CONTENT)
+async def delete_server(server_id: int):
+    query = "DELETE FROM servers WHERE id = $1 RETURNING id;"
+    row = await db.fetch_one(query, server_id)
+    if not row:
+        raise HTTPException(status_code=404, detail="Server not found")
+
+@app.get("/servers", response_model=list[ServerResponse])
+async def get_servers(limit: int = Query(100, ge=1), offset: int = Query(0, ge=0)):
+    query = """
+        SELECT id, hostname, ip_address, state
+        FROM servers
+        ORDER BY id
+        LIMIT $1 OFFSET $2;
+    """
+    return await db.fetch_all(query, limit, offset)
diff --git a/app/models.py b/app/models.py
new file mode 100644
index 0000000..644cd38
--- /dev/null
+++ b/app/models.py
@@ -0,0 +1,28 @@
+from datetime import datetime
+from typing import Literal, Optional
+from pydantic import BaseModel, Field, IPvAnyAddress, ConfigDict
+
+ServerState = Literal["active", "offline", "retired"]
+
+class ServerBase(BaseModel):
+    hostname: str = Field(..., min_length=1, max_length=255)
+    ip_address: IPvAnyAddress
+    state: ServerState
+
+class ServerCreate(ServerBase):
+    pass
+
+class ServerUpdate(BaseModel):
+    hostname: Optional[str] = Field(None, min_length=1, max_length=255)
+    ip_address: Optional[IPvAnyAddress] = None
+    state: Optional[ServerState] = None
+
+class ServerOut(ServerBase):
+    id: int
+    insert_timesatamp: datetime
+    last_update_timestamp: datetime
+
+class ServerResponse(ServerBase):
+    id: int
+
+    model_config = ConfigDict(from_attributes=True)
\ No newline at end of file
diff --git a/cli/__init__.py b/cli/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/cli/main.py b/cli/main.py
new file mode 100644
index 0000000..5f4c9bc
--- /dev/null
+++ b/cli/main.py
@@ -0,0 +1,86 @@
+import typer
+import httpx
+import json
+from typing import Optional
+from enum import Enum
+
+app = typer.Typer()
+API_URL = "http://localhost:8000"
+
+class ServerState(str, Enum):
+    ACTIVE = "active"
+    OFFLINE = "offline"
+    RETIRED = "retired"
+
+@app.command()
+def create(hostname: str, ip: str, state: ServerState = ServerState.ACTIVE):
+    """Create a new server."""
+    payload = {"hostname": hostname, "ip_address": ip, "state": state.value}
+    try:
+        r = httpx.post(f"{API_URL}/server", json=payload)
+        r.raise_for_status()
+        typer.echo(json.dumps(r.json(), indent=2))
+    except httpx.HTTPStatusError as e:
+        typer.secho(f"Error: {e.response.text}", fg=typer.colors.RED)
+
+@app.command()
+def list():
+    """List all servers."""
+    try:
+        r = httpx.get(f"{API_URL}/servers")
+        r.raise_for_status()
+        data = r.json()
+        typer.echo(json.dumps(data, indent=2))
+    except httpx.HTTPError as e:
+        typer.secho(f"Error connecting to API: {e}", fg=typer.colors.RED)
+
+@app.command()
+def get(server_id: int):
+    """Get details of a specific server."""
+    try:
+        r = httpx.get(f"{API_URL}/server/{server_id}")
+        if r.status_code == 404:
+            typer.secho("Server not found", fg=typer.colors.RED)
+            return
+        r.raise_for_status()
+        typer.echo(json.dumps(r.json(), indent=2))
+    except httpx.HTTPError as e:
+        typer.secho(f"Error: {e}", fg=typer.colors.RED)
+
+@app.command()
+def update(server_id: int, hostname: Optional[str] = None, ip: Optional[str] = None, state: Optional[ServerState] = None):
+    """Update a server."""
+    payload = {}
+    if hostname: payload["hostname"] = hostname
+    if ip: payload["ip_address"] = ip
+    if state: payload["state"] = state.value
+    
+    if not payload:
+        typer.secho("No fields to update.", fg=typer.colors.YELLOW)
+        return
+
+    try:
+        r = httpx.put(f"{API_URL}/server/{server_id}", json=payload)
+        if r.status_code == 404:
+            typer.secho("Server not found", fg=typer.colors.RED)
+            return
+        r.raise_for_status()
+        typer.echo(json.dumps(r.json(), indent=2))
+    except httpx.HTTPStatusError as e:
+        typer.secho(f"Error: {e.response.text}", fg=typer.colors.RED)
+
+@app.command()
+def delete(server_id: int):
+    """Delete a server."""
+    try:
+        r = httpx.delete(f"{API_URL}/server/{server_id}")
+        if r.status_code == 404:
+            typer.secho("Server not found", fg=typer.colors.RED)
+            return
+        r.raise_for_status()
+        typer.secho(f"Server {server_id} deleted successfully.", fg=typer.colors.GREEN)
+    except httpx.HTTPError as e:
+        typer.secho(f"Error: {e}", fg=typer.colors.RED)
+
+if __name__ == "__main__":
+    app()
\ No newline at end of file
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 0000000..c15081a
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,26 @@
+services:
+  postgres:
+    image: postgres:17
+    environment:
+      POSTGRES_USER: postgres
+      POSTGRES_PASSWORD: postgres
+      POSTGRES_DB: postgres
+    ports:
+      - "5432:5432"
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U postgres -d postgres"]
+      interval: 5s
+      timeout: 5s
+      retries: 5
+  api:
+    build: .
+    ports:
+      - "8000:8000"
+    environment:
+      DATABASE_URL: postgres://postgres:postgres@postgres:5432/postgres
+    depends_on:
+      postgres:
+        condition: service_healthy
+    volumes:
+      - .:/app
+    command: uvicorn app.main:app --host 0.0.0.0 --port 8000 --reload
\ No newline at end of file
diff --git a/requirements.txt b/requirements.txt
new file mode 100644
index 0000000..8147098
--- /dev/null
+++ b/requirements.txt
@@ -0,0 +1,30 @@
+annotated-doc==0.0.4
+annotated-types==0.7.0
+anyio==4.12.0
+asyncpg==0.31.0
+certifi==2025.11.12
+click==8.3.1
+fastapi==0.124.4
+h11==0.16.0
+httpcore==1.0.9
+httpx==0.28.1
+idna==3.11
+iniconfig==2.3.0
+markdown-it-py==4.0.0
+mdurl==0.1.2
+packaging==25.0
+pluggy==1.6.0
+psycopg==3.3.2
+psycopg-binary==3.3.2
+pydantic==2.12.5
+pydantic_core==2.41.5
+Pygments==2.19.2
+pytest==9.0.2
+pytest-asyncio==1.3.0
+rich==14.2.0
+shellingham==1.5.4
+starlette==0.50.0
+typer==0.20.0
+typing-inspection==0.4.2
+typing_extensions==4.15.0
+uvicorn==0.38.0
diff --git a/tests/__init__.py b/tests/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/tests/test_api.py b/tests/test_api.py
new file mode 100644
index 0000000..2396e05
--- /dev/null
+++ b/tests/test_api.py
@@ -0,0 +1,104 @@
+import pytest
+import pytest_asyncio
+from httpx import ASGITransport, AsyncClient
+from app.main import app
+from app.database import db
+
+@pytest.fixture(scope="module")
+def anyio_backend():
+    return "asyncio"
+
+@pytest_asyncio.fixture(autouse=True)
+async def setup_db():
+    await db.connect()
+    await db.execute("TRUNCATE servers RESTART IDENTITY;")
+    yield
+    await db.close()
+
+@pytest.mark.asyncio
+async def test_create_server():
+    async with AsyncClient(transport=ASGITransport(app=app), base_url="http://test") as ac:
+        response = await ac.post("/server", json={
+            "hostname": "srv-1",
+            "ip_address": "192.168.1.2",
+            "state": "active"
+        })
+    assert response.status_code == 201
+    data = response.json()
+    assert data["hostname"] == "srv-1"
+    assert data["id"] is not None
+
+@pytest.mark.asyncio
+async def test_create_duplicate_hostname_fails():
+    async with AsyncClient(transport=ASGITransport(app=app),base_url="http://test") as ac:
+        first = await ac.post("/server", json={
+            "hostname": "srv-1", # Duplicate
+            "ip_address": "192.168.1.11",
+            "state": "offline"
+        })
+        assert first.status_code == 201
+
+        duplicate = await ac.post("/server", json={
+            "hostname": "srv-1", # Duplicate
+            "ip_address": "192.168.1.12",
+            "state": "offline"
+        })
+    assert duplicate.status_code == 400
+    assert "already exists" in duplicate.json()["detail"]
+
+@pytest.mark.asyncio
+async def test_invalid_ip_fails():
+    async with AsyncClient(transport=ASGITransport(app=app),base_url="http://test") as ac:
+        response = await ac.post("/server", json={
+            "hostname": "srv-2",
+            "ip_address": "invalid-ip",
+            "state": "active"
+        })
+    assert response.status_code == 422 # Validation Error
+
+@pytest.mark.asyncio
+async def test_update_server():
+    # First create
+    async with AsyncClient(transport=ASGITransport(app=app),base_url="http://test") as ac:
+        create = await ac.post("/server", json={
+            "hostname": "srv-update",
+            "ip_address": "192.168.1.11",
+            "state": "active"
+        })
+        server_id = create.json()["id"]
+        
+        update = await ac.put(f"/server/{server_id}", json={
+            "state": "retired"
+        })
+        assert update.status_code == 200
+        assert update.json()["state"] == "retired"
+
+@pytest.mark.asyncio
+async def test_delete_server():
+    # Create to delete
+    async with AsyncClient(transport=ASGITransport(app=app),base_url="http://test") as ac:
+        create = await ac.post("/server", json={
+            "hostname": "srv-delete",
+            "ip_address": "192.168.1.11",
+            "state": "offline"
+        })
+        server_id = create.json()["id"]
+        
+        delete = await ac.delete(f"/server/{server_id}")
+        assert delete.status_code == 204
+        
+        # Verify gone
+        get = await ac.get(f"/server/{server_id}")
+        assert get.status_code == 404
+
+@pytest.mark.asyncio
+async def test_get_servers():
+    async with AsyncClient(transport=ASGITransport(app=app),base_url="http://test") as ac:
+        await ac.post("/server", json={
+            "hostname": "srv-1",
+            "ip_address": "192.168.1.11",
+            "state": "active"
+        })
+        response = await ac.get("/servers")
+    assert response.status_code == 200
+    assert len(response.json()) > 0