CLOUDADV: Decision-Aligned Instance Sizing with Zero-Shot Foundation Models under Drift
Authors: Jack Bell, Giacomo Carfi, Gerlando Gramaglia, Andrea Simioni, Daniele Fontani, Vincenzo Lomonaco
Abstract
Cloud virtual machines are often overprovisioned, creating avoidable cost and operational inefficiency. We present CLOUDADV, an interactive engineer-facing advisory system for cloud instance sizing under workload drift. The system combines zero-shot time-series forecasting with bounded recommendation generation across day-, week-, and month-scale planning horizons. For each query, CLOUDADV constructs a structured decision context from historical utilization, forecast summaries, current VM metadata, candidate instance options, pricing, and explicit sizing heuristics. A higher-capacity LLM is used offline to generate reference recommendations, while a smaller production model is evaluated on the same prompts to assess deployment-time alignment under latency and cost constraints. Evaluation prioritizes downstream recommendation quality using simulated Azure cost savings and ex-post exceedance, with rolling-origin forecast accuracy reported as a secondary diagnostic against classical and supervised baselines. In a case study of seven production VMs, the reference recommendations reduce simulated monthly cost from about $1,503 to $708, yielding $795/month in savings (52.9%) under conservative heuristic constraints, while the highest observed exceedance rate among downgraded cases is 1.5%. Although Chronos-2 does not minimize every forecasting metric, it often induces recommendation patterns similar to those of a supervised per-VM baseline. These results suggest that zero-shot foundation models can support decision-aligned provisioning in non-stationary cloud environments while reducing the operational burden of repeated per-tenant retraining, revalidation, and redeployment.
Driven by conservative over-provisioning to guarantee service reliability, resource utilization in cloud data centers remains at low levels. To mitigate this, the forecast-then-optimize paradigm has emerged to optimize consolidation by anticipating future demands. While emerging time series foundation models promise to enhance this paradigm through zero-shot generalization, existing benchmarks focus solely on prediction error metrics. The actual decision utility of these advanced models remains unverified, rendering their practical value for downstream tasks uncertain. To bridge this gap, we propose CloudCons, a comprehensive end-to-end benchmark designed to evaluate forecasting models within the specific context of cloud resource consolidation. We build high-quality datasets that cover diverse workloads from Huawei Cloud, Microsoft Azure, and Google Borg, capturing distinct service characteristics ranging from synchronized diurnal rhythms to stochastic, pulse-like bursts and high-frequency noise. We conduct an extensive evaluation of statistical, deep learning, and foundation models. Our experiments reveal a pivotal finding: while foundation models demonstrate superior zero-shot forecasting accuracy, this advantage does not inherently translate into better decision utility. Of practical significance, we systematically analyze how the selection of predictive quantiles acts as a critical lever. We provide actionable guidelines for calibrating these selections to balance the trade-off between resource efficiency and service reliability, offering vital insights for real-world deployment decisions.
Deploying a time series foundation model requires GPU infrastructure, engineering overhead, and carries no guarantee of improvement over XGBoost. We provide the first systematic break-even analysis answering when this investment pays off. Across 30 benchmark datasets, we compare zero-shot and LoRA fine-tuned foundation models (Chronos, Moirai, Lag-Llama) against classical baselines (Naive, ETS, ARIMA, XGBoost) at six training set sizes from 2% to 100% of available data. Foundation models outperform classical methods at every evaluated training fraction on 15 of 30 datasets -- GPU deployment is unconditionally justified on these regardless of data volume. On 6 datasets, classical methods surpass zero-shot foundation models with as little as 2% of training data (21-2,768 samples); on the remaining 9, break-even ranges from 24 to 8,361 samples. One robust deployment rule requires no model training: if n_train < 700 and seasonality is non-negligible, use FM zero-shot and skip fine-tuning -- this resolves 10 of 30 deployment decisions immediately. Contrary to common practice, LoRA fine-tuning can actively degrade performance on short series. We operationalise these findings as a two-step decision framework -- compute dataset length and seasonality strength, run a brief 5-10% pilot only if needed -- enabling practitioners to make the FM-versus-classical decision before committing to full infrastructure. Four dataset features motivate mechanistic hypotheses for the remaining cases, though reliable automated prediction at this benchmark scale remains an open problem. Code, benchmark, and decision tools are available at https://github.com/nicolaisi/fm-breakeven.
Time series forecasting drives operational decisions in areas like finance, transportation, and energy. While supervised learning approaches achieve strong performance, they require domain-specific training, feature engineering, and ongoing maintenance. Large-scale foundation models have recently emerged as a zero-shot alternative, avoiding task-specific training much like LLMs. In this work, we evaluate foundation models against standard supervised approaches. Rather than focusing solely on aggregate accuracy, we analyze performance across four operational regimes: periodic human-centric systems, physically constrained processes, stochastic financial markets, and heterogeneous demand forecasting. Our results characterize optimal deployment areas. Foundation models perform well in domains with transferable periodic structures and are efficient for cold-start or long-tail scenarios. Conversely, supervised specialists maintain higher precision in systems governed by strict physical constraints. In financial domains, newer foundation models are rapidly closing the performance gap with supervised specialists. We further quantify trade-offs in inference latency, data drift adaptability, and deployment constraints. Finally, we propose a Complexity Router that assigns each series to the optimal model class using empirical features. We demonstrate that this selective routing achieves higher accuracy and significantly lower inference costs compared to deploying a universal foundation model, providing a practical framework for balancing generalization and efficiency.