Loss of focus.
I think that large parts of IBM.. including much of upper management has lost the focus that was found under Lou Gerstner, who had to dig into the core of what IBM was/is to make it survive, IBM is a Technology driven company.
Now I think that selling off the PC business and the hard disk business were the right thing to do, but they (upper management) haven't been able to replace the revenue with organic growth. Sure IBM have been buying up lots and lots of smaller software companies and a few hw companies, to increase revenue that way. But IMHO that has been kind of defensibly. They haven't been doing gutsy "expand the business into a new marked" kind of buy's.
HP has by buying EDS, Oracle have bought SUN, SAP have bought Sybase...
And to be honest I think that the investors would rather have seen IBM use the 10 Billions on entering or re-entering a marked, rather than pumping up the stock. I mean double the 10 Billions and IBM could have bought Juniper networks. That would have been a strategic move, with CISCO entering the Server Marked.
This buying up stocks is top management trying to force the stock up high enough so that they can make a stock split, that normally also will benefit the stock. It's the same problem with companies around the world, upper management isn't thinking about what is best for the company but what is best for their stock options.