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Serverless Computing

The innovative cost dynamics of serverless computing allow more customers onto the cloud without breaking the bank.

Overview

The latest evolution in cloud computing helps real-time, automated capacity

Serverless computing refers to applications and services that run on a third-party vendor’s off-site server platform (one example is Amazon Web Services’ Lambda Platform). Serverless computing distinguishes itself from physical in-house servers and cloud computing by how it handles scaling, or meeting variations in demand. With physical servers, scaling up means buying and maintaining new hardware, while with cloud computing it means renting more resources. In contrast, serverless computing allows automatic, real-time scaling of server resources based on actual usage. 

Serverless computing is an evolution of cloud computing, a function-as-a-service (FaaS), with which it is often treated synonymously, since serverless platforms handle the function of running the applications.

What's driving this industry?
Market Sizing

The Serverless Computing market in the US could reach USD 1.6–1.8 billion by 2026

Conservative case

USD 1.6 Bn

Base case

USD 1.7 Bn

Expansion case

USD 1.8 Bn

USD billion00.511.52202120222023202420252026
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COVID-19 IMPACT

Impact on the serverless computing industry:

  • Cloud adoption has surged. Microsoft Cloud Services usage has grown almost 8X since the pandemic began, and Azure revenue rose 60% YoY during the nine months ending in September 2020.

  • Scaling of servers can be key for applications experiencing higher traffic due to the Covid-19 pandemic (Google Meet’s daily usage in April was 25X that of January).

  • Most IT leaders have noted budgets increased or remained unchanged, which supports technology adoption (including serverless adoption).

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Market Mapping


Cloud computing giants such as Amazon (AWS Lambda), Google (Google Cloud Functions), Microsoft (Azure Functions), and IBM (IBM Cloud Functions) handle serverless computing platforms and the core service of providing server capacity.

The startups in the industry mainly function as service providers bridging serverless computing vendors with end users. Key among such support services are those that provide cybersecurity, support and consulting, open source codes, and analytics and integrations. In addition to these common categories, startups offer services such as database management, which leading company Fauna offers.

Incumbents
Growth
Early
Seed
Pre-Seed
Serverless function Platform
?
Cyber security
?
Support and consulting services
?
Open source code providers
?
Analytics and integration
?
Other software
?
ServerlessOps
ServerlessOps
ServerlessOps
ServerlessOps
ServerlessOps
ServerlessOps
Amazon
Google
Microsoft
IBM
Cloudflare
Netlify
Iron.io
Elotl
Upstash
Palo Alto Networks
Snyk
Aqua Security
Lightbend
DigitalOcean
Cisco
Aviatrix
Pulumi
Lumigo
Stackery
Thundra
AutoCode
Overclock Labs
SLAppForge
Symphonia
ScalePods
Anyscale
8base
Gadget
Dashbird
Serverless Stack
Altostra
ServerlessOps
Baselime
Amazon
Google
Serverless
Express Serverless
Sparta
Webiny
Serverless Stack
Amazon
Google
Microsoft
Cisco
Rockset
Triggermesh
DataStax
PlanetScale
Fauna
Vendia
Pinecone
Neon
Xata
Aleph.im
Tilo
SurrealDB

The Disruptors


Most of the disruptors identified here were founded beginning in 2015, with the exception of Iron.io and Fauna, which were founded in 2010 and 2011, respectively. Cybersecurity disruptors Snyk and Aqua Securities, which offer a range of security offerings including for serverless computing, remain the highest funded disruptors.

All players offer their products as support services, which enable users to utilize serverless computing effectively and securely.

Serverless function Platform

?

Disruptors

?
Funding in USD Millions
Netlify
212
Iron.io
17
Elotl
9
Watchlist
?
Upstash

Cyber security

?

Disruptors

?
Funding in USD Millions
Snyk
850
Aqua Security
265

Support and consulting services

?

Disruptors

?
Funding in USD Millions
Aviatrix
341
Anyscale
160
Pulumi
58
Lumigo
37
Watchlist
?
8base
Gadget
Stackery
Thundra
AutoCode
Dashbird
Baselime
Overclock Labs
Serverless Stack
Altostra
SLAppForge
Symphonia
ScalePods
ServerlessOps

Open source code providers

?

Disruptors

?
Funding in USD Millions
Serverless
13
Watchlist
?
Webiny
Express Serverless
Serverless Stack
Sparta

Analytics and integration

?

Disruptors

?
Funding in USD Millions
Rockset
62
Triggermesh
8

Other software

?

Disruptors

?
Funding in USD Millions
PlanetScale
105
Fauna
85
Vendia
51
Pinecone
38
Neon
30
Aleph.im
10
Watchlist
?
Xata
Tilo
SurrealDB

Netlify

As the creator of “Jamstack”, a web development architecture based on JavaScript, APIs, and Markup (JAM), Netlify offers a platform for developers to build applications, websites, and ecommerce stores. The platform unites a number of modern web frameworks, serverless functions, and edge computing into one platform. The company entered the serverless market in 2018 with the launch of serverless functions to enable developers to deploy front-end code and back-end functions using a single repo and workflow. As of November 2021, the company served over 2 million developers and its customer base included large corporations such as Unilever, Verizon, Peloton and Twilio. 

In November 2021, Netlify raised USD 105 million in Series D funding at a valuation of USD 2 billion led by Bessemer Venture Partners to double its employee base of 200 employees within 2022.

In January 2022,  Netlify acquired Quirrel, an open source platform for managing and scheduling serverless functions for an undisclosed amount, to utilise Quirrel’s technology to add a “Scheduled Functions” feature to its platform’s serverless capabilities. This feature will enable developers to run functions on a regular and consistent schedule by automating tasks such as backups and running reports. The company also announced that a beta version of Scheduled Functions will be available on the platform for free.

In April 2022, the company released “Netlify Edge Functions,”  a tool that enables developers to build apps and create content on the edge of networks to public beta on its Netlify platform. The new tool offers a full-fledged runtime that can be used for edge rendering and a full runtime environment that enables developers to run serverless JavaScript/TypeScript functions and manage applications. Additionally, users can stream server rendered content, transform request and responses, perform A/B testing or OAuth authentication and support geolocation, localization, and globalization.

Segment:
Serverless function Platform
Total funding:
USD 212.1 million
Disruptor Funding History

Serverless function Platform:

Netlify
Iron.io
Elotl
Upstash

Cyber security:

Snyk
Aqua Security

Support and consulting services:

Aviatrix
Anyscale
Pulumi
Lumigo
8base
Gadget
Stackery
Thundra
AutoCode
Dashbird
Baselime
Overclock Labs
Serverless Stack

Competitive Analysis


Filter by a segment or companies of your choice
Serverless function Platform

Incumbents


Three cloud computing giants dominate the core serverless computing market, according to a 2018 survey that highlighted most respondents, 58%, used Amazon’s AWS Lambda, 23% used Google Cloud Functions (GCF), and 10% used Microsoft Azure Functions.

In addition to serverless platform resources, these three leaders offer a range of support services and tools, including DevOps (which combines the development and operations of functions) and developer tools, application programming interface (APIs, which facilitate interactions between software intermediaries) management, AI, machine learning and Internet of Things (IoT) algorithms, among others, to help optimize their use. These offerings can vary among incumbents, and offer a value-add beyond the common disruptor offerings of open source and analytics, which incumbents tend to offer as well.

Serverless function Platform
Cyber security
Support and consulting services
Open source code providers
Analytics and integration
Other software
In House Development
M&A
Partnership
Investment
Amazon
Google
Microsoft
IBM
Palo Alto Networks
Cloudflare
DataStax
Lightbend
DigitalOcean
Cisco

Notable Investors


No investor data is available

Funding data are powered by Crunchbase
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