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Serverless Computing
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 (such as Amazon Web Services [AWS] Lambda Platform). Serverless computing distinguishes itself from physical in-house servers and cloud computing based on how it handles scaling or meeting variations in demand. With physical servers, scaling up entails buying and maintaining new hardware, while cloud computing requires 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.
Industry Updates
Market Sizing
The US Serverless Computing market could reach USD 11.2 billion–14 billion by 2028
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Use cases
Serverless computing is commonly used across various industries, with the consumer discretionary and communications sectors being the most prominent. Specifically, this includes the diversified consumer services subsegment for consumer discretionary, as well as media and entertainment under communications.
The adoption levels for software infrastructure management are relatively high, as serverless functions platforms enable enterprises to automatically scale server resources for applications in real time, based on actual usage. Moreover, analytics and integration solutions have been commonly used to help enterprises query large databases and streamline data processing for applications.
We have identified key serverless computing use cases below:
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 development tools, support and consulting, open source codes, and analytics and integrations.
Serverless function Platform
Support and consulting services
Open source code providers
Analytics and integration
Other software
The Disruptors
Disruptors in the serverless computing space drive innovation and agility, fill niche markets with specialized solutions, and enhance the ecosystem through complementary tools and educational outreach.
Companies like Netlify, Vercel, and Serverless Inc. showcase their impact by simplifying deployment, providing complementary services, and lowering entry barriers. Their contributions significantly expand the adoption and advancement of serverless technologies.
Funding History
Competitive Analysis
Incumbents
Three cloud computing giants dominate the core serverless computing market. A 2023 survey found that 45%–75% of AWS, Microsoft, and Google Cloud users were using their respective serverless functions, with the highest usage seen with AWS users at around 72%.
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.
Notable Investors
