Computing concept

Serverless computing now cheaper than VMs and containers

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30 June 2017

An industry analysis of serverless cloud pricing by 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.

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

The analyst said that the TCO of serverless tends to be lower than VMs, even when the VM is hosting containers, because there is no need for developers to provision, configure and manage the infrastructure. Giving an example scenario, 451 Research said 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 utilisation means it is cheaper than using VMs when the code is executed fewer than 500,000 times each month.

The Cloud Price Index found that IBM was cheapest for 0.1-second duration scripts, while Azure was cheapest for 10-second scripts, assuming memory requirements match predetermined size allocations. Additionally, IBM offers a distinct cost advantage by allowing users to choose exact memory requirements, whereas other providers round up the figures, resulting in users paying for unused capacity.

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,” said Dr Owen Rogers, research director, Digital Economics Unit, 451 Research, “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.”

“Freemium serverless offerings from the four big cloud providers are already fuelling 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,” said Rogers.

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

Serverless computing, or the ability to execute code on demand with no need to provision the underlying infrastructure, caught on when AWS launched its Lambda Project 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, said 451.

The Cloud Price Index, said 451 Research, is designed to give enterprises and service providers insight into the cloud landscape to facilitate more informed decisions when buying and selling cloud services. Like a consumer price index, the Cloud Price Index is made up of a basket of goods. In this case, say the authors, it is also a specification of the services required to operate a typical web server application including compute, storage, databases, management and serverless. The Cloud Price Index covers 30 public and private cloud capabilities from 50 providers, covering 90% of the global IaaS market.


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