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As CIOs continue to drive cloud computing from being bleeding edge to
establishing it as a mainstream technology capability within the organizations,
recent forays have also focused on shifting from a server-based architecture
to a serverless model to speed-up the pace of technology transformations. A
recent Cloud Foundry global survey of 600 IT decision makers found that 19%
of respondents are already using serverless technologies and that the number is
expected to increase by 42% in the next two years
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Demand for serverless technologies is on the rise because it provides the
opportunity for faster time-to-market, by dynamically and automatically
allocating compute and memory based on user requests. It also provides
cost savings through hands-off infrastructure management, which enables
companies to redirect IT budget and human capital from operations to
innovation. The pay-as-you go model with serverless technologies leads
to a shift from large capital expenditure lock up to flexible on-demand
consumption, allowing users to scale, customize, and provision computing
resources dynamically to meet their exact needs. This, in turn, impacts
business agility.
However, it can be difficult to estimate costs in a serverless model because inputs
are variable. In this white paper, we will introduce a framework for comparing the
total cost of ownership for both serverless and traditional applications, factoring
in infrastructure, development, and maintenance costs. We evaluate the financial
impact and business value of both a traditional server-based architecture (with
Amazon EC2 instances) and a serverless model (with AWS Lambda functions).
Based on this model and the applications evaluated, we see that while
infrastructure costs may be higher with a serverless approach, the total cost of
ownership is significantly lower with serverless due to savings in development and
maintenance costs.
Deloitte Industry Insight
