The company faces major headwinds going into the new year, Sherlund said. Customers don't seem excited about Oracle's on-premise business, and the company faces stiff competition from new data-crunching technologies.
Another headwind facing Oracle is currency rates, Sherlund added.
"Currency will be a 2 to 3 percent headwind so we are not looking for upside to estimates, but rather we will need to look at the constant currency growth rates. The guidance will be slower than previously, given the greater FX headwind over the next two to three quarters," said Sherlund.
Oracle faces competition from EMC, IBM and Hewlett-Packard. This is the first quarter with Mark Hurd and Safra Catz acting as co-CEOs and without Larry Ellison, who built the company, at the helm.
"It's all going to be about can they cross the chasm—this big technology chasm—and make it to the cloud?" Sherlund said.