Serverless3 Oct 2020
Serverless is powerful because:
It’s often cheaper than running the same application on a VPS. Right now, this may be mostly because it’s under-priced. But it does actually require fewer physical resources, since applications scale on-demand and many applications can share the same physical host more efficiently.
Possibly also falling under “cheaper,” it has a lower operational burden. Developers simply upload their code and the cloud provider handles process management and scaling.
Applications that run on serverless platforms are faster because they’re always hosted near the end-user.
It’s such a good business because all of the benefits above come from strong network effects which entrench incumbents. Being able to charge a low price is the benefit of having a lot of customers and high hardware utilization. Being near end-users is the benefit of having built a large, distributed network of data centers. Reliability and scalability are the benefit of significant and prolonged technical investment. Additionally, serverless platforms have proprietary APIs that create lock-in and having a brand that's trustworthy enough to build a business on top of propretiary APIs is a significant accomplishment.
The flip side of all the aspects that make it a good business also make it a good product because application developers get access to the upside of all these network effects, without having to build them themselves. It ends up being a democratizing force more than a centralizing one.