Forecasting & Budgeting

Predicting future spend to avoid bill shock.

Why Forecast?

Finance teams hate variance. Cloud spend is variable (OpEx), which makes it hard to predict compared to traditional data centers (CapEx). Accurate forecasting builds trust between Engineering and Finance.

Methodologies

Trend-based: "We grew 5% last month, assume 5% growth next month." Simple but misses seasonality.
Driver-based: "We expect 10,000 new users, and each user costs $0.05." More accurate but requires knowing unit economics.
Rolling Forecasts: Updating the budget every month/quarter based on actuals, rather than setting a rigid annual budget.

Alerting

Set up budget alerts at 50%, 80%, and 100% of forecast. Don't wait until the invoice arrives to know you overspent.