Why Native Azure Budget Forecasting Falls Short | Technology & AI bringing to light

Picture this: it’s the end of the month, and someone from the finance department is frantically messaging the IT team on Slack about an unexpected surge in the Azure bill. Sound familiar?

This situation could have been avoided with proper budget forecasting. However, here’s the issue—Azure’s native forecasting tools seem effective until they’re not. In my experience with enterprise teams, they often fail precisely when they’re most needed.

Allow me to guide you through the realities of Azure forecasting, the points where it falls short, and how teams are proactively managing their cloud costs before the CFO starts asking difficult questions.

Understanding the Importance of Forecasting Your Azure Costs

I understand that forecasting can feel like an unwelcome chore. However, here’s the impact of neglecting it:

The nightmarish surprise bill: You think everything is running smoothly, and then suddenly—your Azure bill is 40% higher than anticipated. Now, you’re scrambling to explain to senior management why cloud costs have suddenly skyrocketed.
The chaos of new projects: Your development team plans to move that outdated application to the cloud next quarter. Exciting! But what will it cost? Without forecasting, you’re essentially throwing darts at a budget board.
Deteriorating finance relationships: CFOs thrive on predictability. When cloud expenditure varies wildly, it erodes the trust between IT and finance. I’ve seen teams lose budget approvals essential for projects due to this instability.
Opportunities for optimisation missed: Perhaps you should have opted for reserved instances three months earlier, or that high-cost workload could have run on spot instances. Without a forward-thinking perspective, you’re always reacting rather than planning.

What Azure Provides Out of the Box (Spoiler: It’s Insufficient)

Microsoft doesn’t leave you completely in the dark. Azure Cost Management includes some basic forecasting features:

Basic budgets: You can establish spending limits for subscriptions or resource groups. Azure will monitor your spending rate and alert you if you’re heading for trouble.
Forecasting lines: Within Cost Analysis, you’ll notice a dotted line projecting where your spending trajectory lies, based on your recent usage trends.
Email alerts: Set notifications for when you reach 80% or 100% of your budget, or any other threshold that raises your concerns.

These features are somewhat effective but are only useful for straightforward setups with predictable workloads. Sadly, most of us aren’t that fortunate.

Where Azure Forecasting Falls Short

Here’s where I often see teams struggle with Azure’s native forecasting:

Limited visibility: Azure’s forecast typically covers the current billing cycle, perhaps extending one month ahead if you’re lucky. It’s difficult to reassure your CFO when you can’t project Q2 spending while planning for Q1.
The multi-subscription quandary: Enterprise teams don’t usually operate within a single neat subscription. You might have numerous subscriptions scattered across various departments, environments, and regions. Azure’s forecasting treats each as a separate entity, complicating efforts to achieve a unified view of your cloud costs.
Overlooked new projects: If marketing is preparing a large campaign requiring additional compute resources or engineering is launching a new microservice, Azure’s forecasting remains oblivious, relying solely on historical patterns.
Tagging issues: Effective cost allocation demands precise tagging. Unfortunately, we’re often left with resources tagged ambiguously, making forecasts by department or project inaccurate.

I’ve witnessed FinOps teams revert to Excel spreadsheets and manual calculations to bridge these gaps. It’s rarely pretty.

How Turbo360 Tackles These Challenges

This is precisely why we developed Turbo360. We grew weary of seeing talented teams struggle with fundamentally flawed forecasting tools. Here’s how we addressed these critical concerns:

Extended projections: Rather than being limited to next month, Turbo360 forecasts spending up to six months ahead. Your finance team can effectively plan for quarters and half-year budgets with confidence.
A cohesive view: Whether you manage five subscriptions or five hundred, Turbo360 integrates everything into a singular, comprehensive forecast. Your CIO gains a holistic view without having to piece together countless individual subscription reports.
Future-conscious forecasting: Planning a migration? Scaling up for a peak shopping period? Turbo360 allows you to incorporate future workloads into your forecasting model. It’s not purely retrospective; it’s predictive.
Contextual alerts: Instead of vague “over budget” notifications, you receive specific information. Why are costs increasing? Which services are responsible for the change? What differed from last month? This is the kind of insight that enables genuine problem-solving.
Functional cost allocation: Even with imperfect tagging (and it often is), Turbo360 employs advanced mapping techniques to deliver realistic forecasts at the departmental and project levels, providing accurate chargeback and showback information.

In Conclusion

Relying on Azure’s native forecasting is akin to using a candle when floodlights are necessary. It can guide you through simple scenarios, but enterprise contexts demand more advanced solutions.

If you’re weary of unexpected cloud bills, uncomfortable conversations with finance, and the monthly scramble, it’s time to enhance your forecasting capabilities. In cloud financial management, those who can anticipate expenses are the ones who master their costs—and keep their CFOs satisfied.