Why a cloud budget is so hard to build
Unlike a datacenter, the cloud has no fixed cost. The bill follows usage, new projects, migrations, price changes and even exchange rates, since prices are often set in dollars. Extending the trend of the last few months isn't enough: it is the best way to discover an overrun mid-year.
The three inputs of a credible budget
- Your current run: real consumption by application and environment, its trend and its seasonality.
- Your announced projects: new applications, cloud migrations, scale-ups, decommissioning. Every announcement is costed (SKUs, volumes, prod and non-prod environments).
- Levers and context: planned savings (remediation plan, reservations), commitment expiry dates, price changes and the USD/EUR exchange rate.
An example build-up, where planned savings take the budget from €6.1M down to €5.3M, is shown further down this page.
Scenarios to support decisions
We build several scenarios (cautious, likely, with or without optimizations) so IT can defend its budget in front of finance, assumption by assumption, and see the impact of each decision before making it.
A living forecast, with alerts
Once the budget is approved, the year-end forecast is recalculated continuously from billing data. As soon as a scope is on track to exceed its budget, its owner gets an alert, months before the end of the fiscal year. The variance is explained at the monthly SteerCo. See our dashboard and alerting page.
The most common mistakes
- Extrapolating past consumption linearly.
- Forgetting the non-prod environments of new projects.
- Forgetting that a reservation ends, and the return to pay-as-you-go pricing.
- Ignoring the effect of the exchange rate on dollar-based prices.
- Counting the same saving twice in the planned savings.