At least some of their hesitation was because they were selling very expensive systems like Displaywriter and DataMaster [1] to word-intensive corporations and didn't want to cannibalize that revenue. For example, most big law firms still had typing pools in the mid-1980s and those were driven by Wang and IBM word processors, not PCs.

The office suite concept was still a hard sell in the late 1980s and early 1990s; most were seen as a mediocre collection with a star product. Before Windows, people were much less concerned about a common UI and more interested in getting the best-of-breed (or at least the market favorite) in each category. So that led to Lotus 1-2-3 for spreadsheet, Wordperfect for word processing, Harvard Business for presentations, and DBase for databases. None of those came from the same company!

IBM had products in several of these categories but they were not market leaders. By the time IBM got serious about an office suite, there were already three strong options available (Microsoft, Borland/Lotus, and WordPerfect). Then Windows 95/Office 95 hit and it was all over.

[1] http://www-03.ibm.com/ibm/history/exhibits/pc/pc_8.html