As noted in the in this series, economics is a common language that can help IT defend its interests and values. It can also help technical teams clarify choices, such as whether public or private cloud resources are more costly, and at what point.

But when it comes to deciding whether to operate in the cloud, what type of cloud to use and how to manage your applications, it helps to get more granular. In practice, cloud economics is driven by application types, workloads, and related operations.

Classify and (maybe) migrate

A typical enterprise runs a hundred or more applications. Many are old and well-embedded, and some are mission-critical. Some are baked on premises. Others are built for the cloud. A good first step to any kind of economic analysis is to audit and classify them.

One simple but helpful framework is the . Mode 1 apps (“optimized for areas that are more predictable and well-understood”) may or may not be migrated to the cloud. Some legacy apps can be cloud-enabled but not fully migrated. Some applications are stateful, which means they have dependency on the underlying hardware. These applications may have to be rewritten for the cloud. Which brings us to Mode 2 apps (“optimized for areas of uncertainty”). They tend to be cloud-native, where development and deployment is on the cloud and devops processes and container support is essential.