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Like all the big corporations IBM has bought a lot of small competitors in the past. Red Hat was the only name widely known to the public because IBM targets are software tools for business or the backend of the enterprise infrastructure.
Here there is a list of all their acquisitions.
Meanwhile from the beginning of the years 2000s they decided they wanted to become a consultancy company and rely more on external developers (especially from Indian companies). Internal developers slowly became demoralised in the middle of repeated rounds of redundancies, the quality of their services declined and they lost a lot of clients.
You may see IBM as an innovative company, a little bit for their past reputation and a little bit for the recent advanced projects they announced. But although they have some very advanced research centers the bulk of their work is the one they carry out on the client sites. That part of their work is lagging behind. At the end of the '90s you could find many big companies around the world that handed over to IBM almost all their IT systems. Now it does not happen any more. They are one of the many providers.