aster.cloud aster.cloud
  • /
  • Platforms
    • Public Cloud
    • On-Premise
    • Hybrid Cloud
    • Data
  • Architecture
    • Design
    • Solutions
    • Enterprise
  • Engineering
    • Automation
    • Software Engineering
    • Project Management
    • DevOps
  • Programming
    • Learning
  • Tools
  • About
  • /
  • Platforms
    • Public Cloud
    • On-Premise
    • Hybrid Cloud
    • Data
  • Architecture
    • Design
    • Solutions
    • Enterprise
  • Engineering
    • Automation
    • Software Engineering
    • Project Management
    • DevOps
  • Programming
    • Learning
  • Tools
  • About
aster.cloud aster.cloud
  • /
  • Platforms
    • Public Cloud
    • On-Premise
    • Hybrid Cloud
    • Data
  • Architecture
    • Design
    • Solutions
    • Enterprise
  • Engineering
    • Automation
    • Software Engineering
    • Project Management
    • DevOps
  • Programming
    • Learning
  • Tools
  • About
  • Design
  • Engineering
  • Platforms

FinOps From The Field: Cloud Cost Forecasting

  • aster.cloud
  • January 8, 2024
  • 5 minute read

Cloud computing has become an essential part of many businesses and, as a Technical Account Manager, I have seen firsthand how cloud computing can help businesses save money and improve their agility. However, one of the challenges that businesses face when moving to the cloud is forecasting their cloud costs. If you are not careful, your cloud costs can quickly spiral out of control. That is where cloud cost forecasting comes in.

Cloud cost forecasting is essentially the process of predicting your future cloud usage. Forecasting is important in order to get funding, budget or support to start a new project in the cloud. Predicting your cloud costs can help you determine if you are on track with your FinOps strategy.


Partner with aster.cloud
for your next big idea.
Let us know here.



From our partners:

CITI.IO :: Business. Institutions. Society. Global Political Economy.
CYBERPOGO.COM :: For the Arts, Sciences, and Technology.
DADAHACKS.COM :: Parenting For The Rest Of Us.
ZEDISTA.COM :: Entertainment. Sports. Culture. Escape.
TAKUMAKU.COM :: For The Hearth And Home.
ASTER.CLOUD :: From The Cloud And Beyond.
LIWAIWAI.COM :: Intelligence, Inside and Outside.
GLOBALCLOUDPLATFORMS.COM :: For The World's Computing Needs.
FIREGULAMAN.COM :: For The Fire In The Belly Of The Coder.
ASTERCASTER.COM :: Supra Astra. Beyond The Stars.
BARTDAY.COM :: Prosperity For Everyone.

For many companies though, accurate cloud forecasting is one of the most difficult things to get right. In The State of Finops survey, advanced practitioners reported variances of about +/- 5% from their predictions – whilst less advanced reported variances as +/- 20%.

Perspective from the field

When I hear the word “forecasting,” I immediately think of weather predictions and, specifically, seasonality. For example, in the spring, you know that the weather will be milder than in the winter, and it is very unlikely to experience a snowstorm or a heatwave. You can predict things that are more likely to happen in spring since it is usually the rainiest season of the year.

If we apply this concept to cloud workloads, we will also discover seasons and events that will have a significant impact on cloud usage. For example, organizations may experience large spikes in demand during sales periods or year-end holidays. This will have a direct impact on consumption, which will result in additional costs. As a consequence, you will not only need to know your previous data to predict usage, but also the key factors that may influence your future consumption.

Ask yourself:

  1. Does your business have seasonal peaks?
  2. Do you have any upcoming new projects, marketing events, or migrations planned that may result in additional users or consumption for your product?
  3. How often do you collate this data for future input into forecasting cycles?
Read More  For A Successful Cloud Transformation, Change Your Culture First

Historical usage

The other key element in accurate forecasting is historical data. By analyzing your past usage, you can get a good idea of how your workloads are likely to change in the future. Historical data is key to determining costs in the future. This will help you to plan accordingly and avoid any unexpected costs. For example, if you see that your usage has been increasing steadily over the past few months as you are migrating your applications, you can expect it to continue to increase in the future. Additionally, if you see that your usage is fluctuating significantly, you may need to implement a more robust cost-management strategy.

Ask yourself:

  1. Is my historical usage in-line with my defined seasonal peaks (if applicable?)
  2. Does my historical usage line up with expected business events?
  3. Did I appropriately investigate any forecast variations from my actuals? What were the results of variance analysis? Can I apply any lessons learned in my forecasting model?
  4. What’s my long-term trendline look like?

By understanding your historical data, you can make informed decisions about your future costs. TIP: In Google Cloud you can keep track of your consumption by exporting Cloud Billing data to BigQuery.

Tools to predict cloud costs

Now that you know your past data, and possible future events, you can start predicting your future cloud costs. There are a number of tools practitioners use to blend these two together, for example:

  • Your native cloud cost management tool (In GCP, that’s the GCP Billing console)
  • Cost Estimation APIs
  • Spreadsheets
  • Machine learning models using BQML or Vertex-AI
  • Third-party forecasting tool

The best way to forecast depends on your specific needs and budget. If you have a small budget and are comfortable using spreadsheets, you can use that method. However, if you have a larger budget and need more accurate forecasts, you may want to consider using a cloud cost management tool or a third-party forecasting tool.

Read More  Rackspace Technology Expands Strategic Relationship With Amazon Web Services

All things being equal, the out-of-the-box prediction feature in the Google Cloud Billing Console is a great place to start. The console provides an estimated cost for the current month based on your usage. This forecast is a combined total of actual cost to date and the projected cost trend. It is an approximation based on historical usage of all the projects that belong to that billing account. You can also adjust this forecast by filtering your report by project, service, sku, or folder in your organization.

Cloud forecasting is more manageable for a single project than for the entire organization. It is advised to forecast each project individually and then combine the forecasts to improve accuracy. The divide-and-conquer strategy is always a good approach to start small and end up with a very comprehensive forecast.

Experience from the field

I was recently involved in a forecasting exercise for a retail customer to calculate their spending for the upcoming year. The customer did not have anything specific to predict their yearly commitment with Google Cloud for this reason we, the Google Cloud account team, worked and prepared a rough estimate of their future cloud costs.

One of the good things about this customer is that they were not new to GCP so we had several advantages to predict their costs:

  • We could get information from their historical data
  • We knew their cloud journey and current maturity level
  • We were also very familiar with their main workloads
  • And they shared with us their general plans for the following year

These were just a few advantages. On the other hand, since we didn’t know the details of each project, we couldn’t predict each project separately and combine all predictions later. As an alternative, we divided the spending and aggregated it by type of service: Compute Engine, GKE, Analytics, Networking, etc. In order to complete the estimate we followed the next steps:

  1. Group all spending by service category (analytics, compute, networking, etc.)
  2. Calculate the average of the current and past two months’ spending for each service category
  3. Calculate the average of the same period from a year ago
  4. Compare the two averages to identify trends and assign each category its growth percentage
  5. Factor in all upcoming plans. Apply corrections for workloads that are stable, new, or intermittent
  6. Share the estimate with the customer and adapt it based on their feedback
Read More  Cloud Code Makes YAML Easy For Hundreds Of Popular Kubernetes CRDs

The accuracy of our predictions can only be determined by the passage of time, there are always unforeseen factors that can affect the outcome of events. Only time will confirm how accurate our predictions are.

Final piece of advice

When forecasting your cloud costs, it’s important to be realistic. Don’t just assume that your costs will stay the same. Factor in changes in your cloud usage, changes in your cost drivers, and changes in the cloud market or pricing. Something that I have learned while helping my customers understand their cloud costs is that some products are used consistently, while others are used sporadically. For example, a product might be used heavily for one month and then not used at all for three months.

Lastly, cloud cost forecasting is an ongoing process that requires regular review and recalculation. Making small changes throughout the year will yield better results than waiting until the end of the year to make changes.

Now that you know how to forecast your future cloud costs, you can start tracking and monitoring your actuals versus your forecast and use variance analysis.

By: Alvaro Torroba (Technical Account Manager)
Originally published at: Google Cloud Blog

Source: cyberpogo.com


For enquiries, product placements, sponsorships, and collaborations, connect with us at [email protected]. We'd love to hear from you!

Our humans need coffee too! Your support is highly appreciated, thank you!

aster.cloud

Related Topics
  • Cost Management
  • FinOps
  • Google Cloud
You May Also Like
View Post
  • Engineering

Just make it scale: An Aurora DSQL story

  • May 29, 2025
View Post
  • Engineering
  • Technology

Guide: Our top four AI Hypercomputer use cases, reference architectures and tutorials

  • March 9, 2025
View Post
  • Computing
  • Engineering

Why a decades old architecture decision is impeding the power of AI computing

  • February 19, 2025
View Post
  • Engineering
  • Software Engineering

This Month in Julia World

  • January 17, 2025
View Post
  • Engineering
  • Software Engineering

Google Summer of Code 2025 is here!

  • January 17, 2025
View Post
  • Data
  • Engineering

Hiding in Plain Site: Attackers Sneaking Malware into Images on Websites

  • January 16, 2025
View Post
  • Computing
  • Design
  • Engineering
  • Technology

Here’s why it’s important to build long-term cryptographic resilience

  • December 24, 2024
IBM and Ferrari Premium Partner
View Post
  • Data
  • Engineering

IBM Selected as Official Fan Engagement and Data Analytics Partner for Scuderia Ferrari HP

  • November 7, 2024

Stay Connected!
LATEST
  • 1
    Just make it scale: An Aurora DSQL story
    • May 29, 2025
  • 2
    Reliance on US tech providers is making IT leaders skittish
    • May 28, 2025
  • Examine the 4 types of edge computing, with examples
    • May 28, 2025
  • AI and private cloud: 2 lessons from Dell Tech World 2025
    • May 28, 2025
  • 5
    TD Synnex named as UK distributor for Cohesity
    • May 28, 2025
  • Weigh these 6 enterprise advantages of storage as a service
    • May 28, 2025
  • 7
    Broadcom’s ‘harsh’ VMware contracts are costing customers up to 1,500% more
    • May 28, 2025
  • 8
    Pulsant targets partner diversity with new IaaS solution
    • May 23, 2025
  • 9
    Growing AI workloads are causing hybrid cloud headaches
    • May 23, 2025
  • Gemma 3n 10
    Announcing Gemma 3n preview: powerful, efficient, mobile-first AI
    • May 22, 2025
about
Hello World!

We are aster.cloud. We’re created by programmers for programmers.

Our site aims to provide guides, programming tips, reviews, and interesting materials for tech people and those who want to learn in general.

We would like to hear from you.

If you have any feedback, enquiries, or sponsorship request, kindly reach out to us at:

[email protected]
Most Popular
  • 1
    Cloud adoption isn’t all it’s cut out to be as enterprises report growing dissatisfaction
    • May 15, 2025
  • 2
    Hybrid cloud is complicated – Red Hat’s new AI assistant wants to solve that
    • May 20, 2025
  • 3
    Google is getting serious on cloud sovereignty
    • May 22, 2025
  • oracle-ibm 4
    Google Cloud and Philips Collaborate to Drive Consumer Marketing Innovation and Transform Digital Asset Management with AI
    • May 20, 2025
  • notta-ai-header 5
    Notta vs Fireflies: Which AI Transcription Tool Deserves Your Attention in 2025?
    • May 16, 2025
  • /
  • Technology
  • Tools
  • About
  • Contact Us

Input your search keywords and press Enter.