HP acquired EDS in 2008. Stagnates and splits into hardware and services companies in 2015.
Xerox acquired ACS in 2009. Stagnates and splits into hardware and services companies in 2016.
I attribute this to a few dirty little secrets rarely mentioned.
1. People with titles starting with C are risk takers. They try bold moves to move the needle. Rarely does this really bite them in the ass. Even if they are fired in disgrace, they are still usually given a golden parachute to tide them over until the next corporation hires them for more money to try it again.
2. Then there is the problem with the strategy of an old school hardware company trying a big move into solutions or services etc. Namely the barrier to entry for competition is completely different in the two industries. How much it would cost you to start up a manufacturing entity designing, building, and selling an office machine that would even take the bottom role in the industry? Now take a guess at how much it would cost you to open shop reselling an already known name brand software package to businesses in Anytown USA. The difference in cost for opening a viable ECM reseller shop compared to launching a viable printer manufacturing business is several orders of magnitude.
3. The hardware business does not survive selling printers, copier, etc. They keep the doors open because you have to run the thing. To paraphrase an old presidential candidate, its the annuity stupid. You pay for your device output by the page. This may be per copy or buying ink or toner. In any event the money made on the actual hardware sale often pales in comparison to the profit they make once it is in place. Even though most manufacturers have a direct selling arm, the corporate mother ship does not care who sells the hardware, as long as someone does, and keeps you filling the annuity stream.
I'll agree that there is an annuity component to the software business, but unless your software dies at the expiration of your contract, many businesses will opt out of your game and continue to run their existing software which is good enough while you get no additional money. See Windows XP and Office 2010. Maybe your company decides to go with a subscription model. No money, software no workee. This may play well in top tier businesses but in the bottom 95%, there is always a lower cost alternative to steal your business 5 years from now.
Sure the paperless office is just around the corner, but its been circling the drain for nearly 30 years. Most of the weak have been weeded out. Often the paperless office means the company which creates the content no longer has to pay to print and ship the document to you. But as often as not, it ends up on paper, its just the end user who pays the cost of printing. Maybe your business does not fall in this category and you are all iPad, all the time. But industry wide, printed page volumes have leveled off. Maybe they shifted to a different industry, segment, use etc. But make no mistake marks still go on paper. Unfortunately for Xerox, Ursula Burns long ago lost interest in marks on paper and gave up on large swatches of the business. Almost all products sold with Xeroxs name on them are manufactured by Fuji, not Xerox, and Xerox has abandoned all but a scant few of their largest customers to their dealers. You cant reap the golden eggs when you have sold the goose.