Orlando Bravo and IBM CEO Arvind Krishna on AI, the Future of Software, and IBM’s $34B Red Hat Deal

Jan 29, 2026

Arvind Krishna, IBM CEO known for leading IBM’s shift to hybrid cloud and AI and for the Red Hat acquisition, joins a live fireside chat. He explains why AI is good for software. He recounts the Red Hat deal and its hybrid cloud strategy. He predicts agents on systems of record, champions smaller domain models, and stresses deliberate scaling of AI.

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INSIGHT

Red Hat Was A Hybrid Cloud Bet

Arvind Krishna bought Red Hat to enable hybrid cloud by combining Red Hat's Linux/OpenShift with IBM's enterprise reach.
He saw OpenShift as a tiny $110M asset that could scale to $1.5B+ by straddling public and private clouds and avoiding vendor lock-in.

ANECDOTE

Partner First Then Acquire

Krishna partnered with Red Hat first to test management, client reception, and OpenShift's viability before pursuing acquisition.
He 'kicked the tires' via deep partnership and internal container pilots for about a year before making an offer.

INSIGHT

Strategy Was To Become A Software-First Company

Krishna reshaped IBM by pruning non-core businesses and doubling software to ~45% of revenue, boosting growth and margins.
He split off low-innovation services and increased software R&D and M&A firepower via operational cash flow.

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Recorded live at Thoma Bravo’s 2025 AI Summit, this episode features a fireside chat between Thoma Bravo Founder and Managing Partner Orlando Bravo and IBM CEO Arvind Krishna. Krishna shares an operator’s view on why AI is unequivocally good for software—boosting developer productivity, expanding entry-level hiring, and unlocking billions in back-office automation that IBM has reinvested into software R&D and growth.

The conversation also explores IBM’s $34 billion acquisition of Red Hat, including the strategic investment in hybrid cloud and OpenShift, how the deal scaled beyond expectations, and why conviction was critical despite initial market skepticism.

Looking ahead, Krishna outlines what’s next for enterprise AI: agents layered on systems of record, smaller purpose-built models, and why companies that scale AI deliberately will pull ahead.

For more information on Thoma Bravo's Behind the Deal, visit https://www.thomabravo.com/behindthedeal

Learn more about Thoma Bravo: https://www.thomabravo.com/

Learn more about IBM: https://www.ibm.com/case-studies/ibm-client-zero?lnk=hpls1us

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