Create an instance template with the smallest available machine type, and use an image of the third-party application taken from a current on-premises virtual machine. Create a managed instance group that uses average CPU utilization to autoscale the number of instances in the group. Modify the average CPU utilization threshold to optimize the number of instances running.

Create an App Engine flexible environment, and deploy the third-party application using a Dockerfile and a custom runtime. Set CPU and memory options similar to your application's current on-premises virtual machine in the app.yaml file.

Create multiple Compute Engine instances with varying CPU and memory options. Install the Cloud Monitoring agent, and deploy the third-party application on each of them. Run a load test with high traffic levels on the application, and use the results to determine the optimal settings.