Serverless Boom or Bust? An Analysis of Economic Incentives

Serverless computing is a new paradigm that promises to free cloud users from the burden of having to provision and manage resources. However, the degree to which serverless computing will replace provisioned servers remains an open question.

To address this, we develop an economic model that aims to quantify the value of serverless to providers and customers. A simple model of incentives for rational providers and customers allows us to see, in broad strokes, when and why serverless technologies are worth pursuing. By characterizing the conditions under which mutually beneficial economic incentives exist, our model suggests that many classes of customers can already benefit from switching to a serverless model and taking advantage of autoscaling at today's price points. Our model also helps characterize technical research directions that would be likely to have impact in the market.