Oracle posts flat revenues on slow software sales

Re: I wonder...

Boat anchor vendor + legacy software business = going nowhere fast....I can't see why anyone would use most Oracle products on a greenfield site these days...

Re: who gets fired next?

Oh Alison, your blue-ness shines through.

Re: Whats wrong with 10% ?

Why is that "modest" ? i wish i got a 10% raise...

Cost of capital. The market for capital, taken as a whole, has an "idea" of what kind of return it should get. So if a company wants to raise capital consistently by selling equity - and that is the point of the stock corporation - it has to demonstrate a return at or above that level. There are various ways to do that: increase in stock price, dividends, stock splits (when they lead to an increase in price),stock bybacks, etc. Those are all ways of returning capital to investors.

Cost of capital and expected returns vary from sector to sector and company to company, because they're based in part on estimated risk and in no small part on "behavioral" (non-rational) factors. But in IT, very broadly speaking, 10% annual growth in net profits is indeed generally considered modest in this context. Unfair and/or unrealistic? Perhaps - but the point is, when you show whatever the capital market considers "modest" returns for your firm, it punishes you by discounting your stock price. And that in turn raises your cost of capital even higher, because it means you get less for your equity and pay more for your debt.