451 Research: Serverless Computing Usually Cheaper than Virtual Machines and Containers

451 Research has found that, for the majority of new applications, serverless computing offers a lower cost of ownership (TCO) than virtual machines (VMs) and containers.

Serverless computing is the ability to execute code on demand, with no need to provision the underlying infrastructure, and it caught on when AWS launched Lambda in 2014. IBM’s Bluemix and Google soon followed, with Microsoft the most recent hyperscaler to enter the market.

The term ‘serverless’ implies that no servers are used to run an application or service; but in reality, this model means that developers and cloud operators do not need to worry about the complexity and maintenance of VMs or containers.

The TCO of serverless computing tends to be lower than VMs, according to 451 Research, even when the VM is hosting containers, because there is no need for developers to provision, configure and manage the infrastructure.

AWS, Google, IBM, Azure

As an example scenario: when a serverless function is active for just three quarters of the month, it only takes a 10-minute saving in operational overhead for serverless to beat virtual machines on TCO. Even without the savings in developer time, the ability of serverless to increase utilization means it is cheaper than using VMs when the code is executed fewer than 500,000 times each month.

451 researchWhen analyzing serverless offerings from the big four cloud providers – Amazon Web Services (AWS Cloud), Google cloud, Microsoft Azure and IBM Cloud – 451 Research’s Cloud Price Index shows that IBM generally offers the least expensive service, with Microsoft leading for certain configurations.

451 Research’s Cloud Price Index finds that IBM is cheapest for 0.1-second duration scripts, and Azure is cheapest for 10-second scripts, assuming memory requirements match predetermined size allocations. Plus, IBM would offer a distinct cost advantage by allowing users to choose exact memory requirements. 

‘More than a hype’ 

Considering the similarities in pricing methods and offerings between providers, 451 Research believes serverless is poised to undergo a round of price cutting this year.

“Serverless is more than just hype; it has the potential to transform the way we develop, build and run applications in the cloud. Understanding the economics of serverless technology is vital to understanding its potential to disrupt the industry,” said Owen Rogers, research director, Digital Economics Unit, 451 Research. “Freemium serverless offerings from the four big cloud providers are already fueling the growth of serverless services by stimulating experimentation and helping enterprises gain skills. This could lead serverless to be the next cloud price war battleground.”

451 Research expects adoption of serverless – or FaaS (functions as a service) – to continue growing over the next few years. In its 2016 Voice of the Enterprise (VotE): Cloud Transformation, Workloads and Key Projects, 37% of the IT decision-makers surveyed were already using serverless technology to some degree.

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