It's a pivot
Yes, their revenues are down. They always knew they would drop for a while. This is known as a pivot and is fully expected while they invest in their future business and watch their past business disapear. Microsoft have done this too and come out the other side smiling with higher profit per revenue.
The real question is whether IBM have the ability to build a services business at all given their love of high cost slow to deliver solutions, I certainly hope so as they have a lot to offer the industry. The future (and services in general) is agile, good value, quick to market and that might take quite a large crowbar for IBM to achieve.
The length of time their pivot is taking is a testament to this, and may indicate they are better off shrinking the company and keeping their large slow customer base while just accepting that they don't want to change.
Other "AI"* vendors have managed to productise individual pre-learned ML algorithms such that they can be integrated immediately without costly consultancy. They also have easy to use ML systems which allow experimentation and quick delivery for anyone who understands the data. This may be why IBM are having trouble - they are trying to keep the consultancy engagement in a world where that's not really done any more.
*The name AI makes me cross, we're literally just talking about machine learning and pattern recognition following very well understood algorithms. AI implies something more than that which just doesn't exist right now. When people say "we don't even know how the machine works" they are lying or stupid - they know the algorithm and could easily reproduce the results manually using maths.