In today’s tech landscape, organizations have been looking closely at the cost-benefit of modernizing applications, with a big question on their minds: Is it better to go on-premises, in the cloud or both?

In addition, companies are looking at what specific cloud services, if any, they’re going to use, according to theCUBE industry analyst Rob Strechay.

“That’s a big key to this, because that has some ability to lock people into particular clouds,” he said.

To discuss cloud-native applications, how they’re deployed and a recent survey conducted by Enterprise Strategy Group, Strechay spoke with Paul Nashawaty (pictured), principal analyst at ESG, a division of TechTarget, during the latest Analyst ANGLE segment on theCUBE, SiliconANGLE Media’s livestreaming studio.

Digital transformation

In the world of cloud-native, it’s an exciting time. Companies have been going through “digital transformations” for many years, which is often viewed as either a noun or a verb. There’s a lot of data that goes along with what organizations are looking at today, according to Nashawaty.

“When we look at research, we see that 64% of organizations are looking to build and deploy cloud-native applications based on microservices architecture. So it’s pretty exciting to think about that,” he said.

Organizations today need to overcome the challenges at the same time, according to Nashawaty, who said he likes to tell the narrative of a “past, present and future” for application modernization. Some organizations are working with their traditional or heritage applications, which may be a virtual machine. Others are looking at containerization, microservices, orchestration and more.

“Sixty-four percent … of the respondents that did our survey are delivering cloud-native applications based on microservices,” he said. “We see that 33% are using multitier or traditional-based cloud-native application approaches, and that’s largely due to the heritage or siloed applications that are being deployed.”

Upcoming growth

The interesting thing about this, according to Nashawaty, isn’t just what’s being seen today, but what’s on the way in the next two years of growth. When it comes to the percentage of production applications and microservices and cloud-native architectures, 46% of organizations that responded to ESG’s survey are running 26% to 50% of their production applications on microservices.

“In contrast, what we asked was: What is happening over the next two years?”  Nashawaty said. “We see that 39% of respondents indicate that they’re running 51% to 74% of their production applications on microservices, and 29% are going to be running 75% or more of their applications on microservices architecture. It’s a new world, a new technology.”

Similar sentiments have been expressed in conversations Strechay has been having in recent months. Companies have been saying the same thing, where many are still trying to get their heads wrapped around new modern architecture while deciding which apps they’re actually going to modernize, according to Strechay.

“There is that cost-benefit analysis,” he said. “And I think, especially in this type of economy, they’re tying it back to revenue for more and more of what they’re trying to achieve. I think that’s a huge piece of this.”

Here’s the complete Analyst ANGLE segment:

Photo: SiliconANGLE