Enterprise

Companies are turning to serverless technology, made popular by clouds like Amazon, Microsoft, and Google, as a way to cut costs by making more efficient use of cloud infrastructure

Google Cloud CEO Thomas Kurian at Google Cloud Next 2019
Google Cloud CEO Thomas Kurian. Google
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Serverless computing is emerging as one of the major new ways to build large-scale cloud applications, while reducing the headache of managing server infrastructure. It's also becoming increasingly popular as a way for companies to save money from their cloud-computing bills. 

Despite the name, serverless computing still involves servers. The idea is that an application can summon the cloud resources it needs to run, at the very moment it needs them — and then clear them afterward. That's useful for areas like retail and online gaming, where some websites and apps see huge spikes on certain days, followed by a lull.

This can lead to serious cost savings in some scenarios, Tony Iams, the research vice president at Gartner, said: Companies are increasingly relying on serverless technology from the likes Amazon Web Services, Microsoft, Google Cloud, and even some startups to reduce the amount of infrastructure they have to manage. 

Beyond a reduced need for cloud infrastructure that might otherwise sit idle, Iams said fewer worries about the figurative plumbing of their applications frees up developers to be more productive. 

"The cost of administration is significantly reduced," Iams told Business Insider. "To get back to the basic promise here, it means that you can spend more of your budget on innovation and delivering business value and less on administrative overhead."

'It's truly the pay for what you use model'

It's long been the promise of cloud computing that you pay only for what you use. But retailers, for example, often have to guess how much capacity they'll need for big shopping days like Black Friday, meaning they often end up preparing for more than they ultimately need. It's the same in video games: Without careful planning, the first few days of a popular new title can overwhelm the servers. 

The ability for applications to automatically scale up is the logical extension of the basic cloud model, said Pali Bhat, the vice president of product management and design at Google, since serverless computing by design creates only the infrastructure a service needs in the moment.

"It's truly the pay for what you use model," Bhat told Business Insider. "That from an economic perspective is very, very attractive to customers as well. One of the common things we see our customers do is start to stitch together the entire set of applications to really have serverless be the glue across that entire IT infrastructure and application."

Read more: Amazon Web Services pioneered serverless computing in 2014, and Microsoft and Google followed suit. Here's why companies are turning to this new technology to cut cloud costs and make life easier for developers.

Startups are also jumping in on serverless technology by building tools that make it easier for customers to run these types of applications. For example, the startup Ozcode builds tools that help developers with debugging serverless applications built with Microsoft technology, and cofounder and Chief Technology Officer Omer Raviv said the pricing model was a major factor in attracting customers.

"It's extremely alluring to developers, and also the economic interest is there," Raviv told Business Insider. "The cloud vendors are saying you only pay for what you consume. We charge you by the second. Companies naturally like the sound of that. They like the economic model of you only pay for what you use."

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Rosalie Chan
Rosalie Chan is a senior editor for Business Insider's tech team. Previously, she covered cloud computing and enterprise tech, reporting on companies like Google Cloud, Amazon Web Services, Microsoft, Intel, Alibaba Cloud, Atlassian, GitHub, VMware, Broadcom, and more. She has written extensively on topics including cloud computing, developer companies, open source, and sexism and sexual harassment in the tech industry. She has received the San Francisco Press Club award for continuing coverage for her reporting on sexism and sexual harassment in Silicon Slopes and the Excellence in Business / Consumer / Tech Reporting award from the Asian American Journalists Association for her investigation into the coding boot camp Holberton School. Most recently, she was an editor on the Business Insider investigative package, The True Cost of Data Centers, which received a George Polk Award and an honorable mention from SABEW.Rosalie joined Business Insider after working as a software engineer and freelance journalist. She studied journalism, computer science, and technology and business law at Northwestern University. Her work has previously appeared in TIME, the Huffington Post, VICE, Pacific Standard, Inverse, Chicago magazine, the Chicago Reporter, and more. She's based in San Francisco.