In the context of cloud computing, forecasting involves predicting future resource needs based on past usage data and trends. This can help organizations plan their cloud resource allocation and budgeting, helping to optimize costs and ensure sufficient resources to meet demand.

Forecasting in cloud computing works by analyzing historical data on cloud usage and costs, and then using statistical techniques to predict future trends. This can involve simple methods like linear regression, or more complex methods like machine learning.

Consider a company that operates a cloud-based e-commerce platform. By analyzing their historical traffic and sales data, they can forecast the expected increase in traffic during the holiday season and scale their cloud resources accordingly to ensure smooth operation during peak times.