The Benefits of Serverless Architecture: Guide to Serverless Computing

Aleksandra Velickovic

May 29, 2024

As you look to scale your applications and improve efficiency, serverless architecture is emerging as an appealing option. Serverless computing allows you to build and run applications without having to manage infrastructure, which leads to increased agility and reduced costs. This article explores the benefits of serverless architecture and how it works. 

We cover how serverless automatically manages back-end resources, scales seamlessly, and helps you focus on writing code. You’ll learn how the pay-as-you-go pricing model can significantly reduce expenses. We also discuss use cases where serverless shines versus situations where traditional servers may be preferable. By the end, you’ll understand what serverless means and whether it could be the right choice for your next IT project.

What is Serverless Architecture?

Serverless architecture is a cloud-computing development model where the cloud provider dynamically manages the allocation of machine resources. Unlike traditional architectures, you don’t need to provision, scale, or manage servers. You might be wondering, “How is this possible?”. With serverless computing, you can write and deploy code without worrying about the underlying infrastructure. All you need is the support of cloud computing consultants.

Key components of serverless architecture

Serverless architectures rely on several key components to deliver a streamlined development and deployment experience.

  • Functions as a Service (FaaS). The foundation of serverless computing, FaaS lets developers run code in response to events, eliminating server management. Popular options include AWS Lambda, Azure Functions, and Google Cloud Functions.
  • Event-Driven Architecture. Serverless applications are often event-driven, triggered by events like HTTP requests, database updates, or message queues. This optimises resource usage.
  • Backend as a Service (BaaS) (Optional). BaaS offers cloud-based services like authentication, databases, and real-time data management, allowing developers to prioritise the front end and user experience.

Additional considerations

  • Managed Services. Cloud providers offer various managed services that complement serverless architectures. These services handle tasks such as storage, messaging, and monitoring, freeing developers to focus on code.

Top Benefits of Serverless Architecture

Cost efficiency

With serverless architecture, you only pay for the resources you consume. Since the cloud provider allocates resources dynamically, you don’t have to pay for idle infrastructure. This pay-as-you-go model can significantly reduce costs.

For example, Google Cloud Serverless clients deploy their applications 95% faster and reduce infrastructure costs by 75%.

Automated scalability

Serverless architecture allows applications to scale automatically based on demand. The cloud provider will allocate more resources when traffic increases and scale down when demand decreases. This automated scaling means you don’t have to provision servers manually to manage traffic changes. Your application can handle spikes in demand without impacting performance or stability.

Increased agility

With a serverless approach, developers can build and deploy applications much faster. They don’t have to spend time managing infrastructure, operating systems or runtime environments. 

Capaciteam has seen a 3x increase in development velocity after moving to serverless architecture. Developers can now focus on building feature-rich applications instead of worrying about infrastructure management.

Resilience and high availability

Serverless applications run on managed infrastructure, so the cloud provider ensures your application remains highly available. If a server fails, another one will automatically take over and continue running your application. 

The cloud provider also maintains the infrastructure and runtime, performing updates and security patches to keep the environment secure and up to date. This results in a resilient and robust architecture without the hassle of managing infrastructure.

Use Cases Showcasing the Power of Serverless Computing

Scalable web applications

Serverless architecture is ideal for building scalable web applications. As traffic increases, the cloud provider will automatically allocate more resources to handle the additional load. This allows your application to scale instantly without provisioning additional servers manually. Some examples of web applications built on serverless include Netflix, Uber, and Airbnb.

Stream processing

Serverless computing is also useful for processing streaming data in real time. Services like AWS Lambda and Azure Functions can be triggered by event streams to perform actions as data is generated. For example, you can process clickstream data as users interact with your website or mobile app, enrich and filter IoT sensor data as it is emitted, or transform financial trades as they are executed.

Scheduled tasks

You can use serverless functions to run scheduled tasks that execute at fixed intervals or set points in time. This is a lightweight alternative to handling cron jobs or Windows Task Scheduler on dedicated servers. You can schedule tasks to run daily, weekly or at a precise time. 

Some examples include:

  • Running daily database backups
  • Sending out newsletters or marketing emails
  • Deleting temporary files or cached data
  • Monitoring system health and sending alerts


Serverless architecture works well for building microservices. Each function acts as an independent service with its own logic and data storage. Microservices built on serverless platforms can start up and scale extremely quickly without managing the underlying infrastructure. This makes serverless a compelling choice for developing robust and scalable microservices architectures.

In summary, serverless computing provides several useful capabilities for building and deploying different types of applications or system components in a highly scalable fashion without the hassle of infrastructure management. The use cases highlighted here are just a few examples of the power and flexibility of serverless architecture.

Industries Benefiting from Serverless Architecture

Serverless architecture’s scalability, cost-efficiency, and agility make it a compelling choice across various industries. Here’s a glimpse into how some sectors are leveraging the advantages of serverless architecture:

  • Media and Entertainment:
    • Streaming services like Netflix and Hulu utilize serverless for real-time video transcoding and content delivery, ensuring smooth playback experiences for users.
    • Gaming companies can leverage serverless for in-game events, matchmaking, and leaderboards, scaling effortlessly with player surges.
  • E-commerce:
    • Serverless functions can handle order processing, payment transactions, and personalised recommendations efficiently, leading to a smooth customer journey.
    • E-commerce platforms can leverage serverless for dynamic pricing and flash sales, scaling resources up and down based on demand.
  • Fintech:
    • Serverless is ideal for real-time fraud detection and risk analysis, processing financial transactions securely and quickly.
    • Personalised financial services and robo-advisors can benefit from serverless architecture for data analysis and algorithmic calculations.
  • Internet of Things (IoT):
    • Processing and analysing vast amounts of sensor data from IoT devices becomes efficient with serverless computing. Functions can be triggered by incoming data streams, enabling real-time insights and device management.
    • Serverless is cost-effective for processing low-volume data from individual sensors but can also scale seamlessly for large-scale deployments.
  • Healthcare:
    • Real-time data analysis of medical devices and patient records becomes achievable with serverless.
    • Serverless can be used for appointment scheduling, medication reminders, and personalised healthcare recommendations all while adhering to strict data privacy regulations.
  • Non-profit and Educational Institutions:
    • Serverless allows non-profits to run fundraising campaigns and online donation platforms with minimal IT infrastructure investment.
    • Educational institutions can leverage serverless architecture for online learning platforms, personalised learning tools, and efficient student management systems.

These are just a few examples, and the potential applications of serverless architecture continue to grow across diverse industries. As companies strive to become more agile and data-driven, serverless will likely play an increasingly crucial role in building and deploying innovative applications.

FAQs on Serverless Architecture

What are the main advantages of serverless architecture?

Serverless architecture allows developers to focus on writing code without worrying about managing infrastructure. It eliminates the need to provision and maintain servers. Some of the major benefits of serverless architecture are:
1. Reduced operational costs
2. Flexible scaling
3. Faster development

How does serverless architecture reduce costs?

With serverless architecture, you only pay for the compute time you consume. The cloud provider charges you based on the number of function executions, their memory usage, and duration. There are no charges when your code is not running.
This is unlike provisioning servers where you have to pay for the servers whether you use them or not. One of the main advantages of serverless architecture is that it eliminates the need to overprovision resources to handle spikes in traffic. It automatically scales to match demand, so you only pay for what you use.

What are some use cases of serverless architecture?

Some excellent use cases for serverless architecture include:
Web/Mobile APIs. Serverless functions are a great fit for building REST APIs to power web and mobile applications.
Event-driven computing. Serverless functions can be triggered by events from sources like storage services, IoT devices, webhooks, etc. This makes them suitable for event-driven computing use cases.
ETL (Extract, Transform, Load) pipelines: Serverless functions are useful for processing and manipulating data in ETL workflows.
Chatbots. Serverless architecture is a good option for building chatbots. The functions can be triggered by chat events and used to process user input and generate responses.
IoT backends. Serverless functions can be used to process events from IoT devices, analyse sensor data, and trigger other actions. This makes them suitable for IoT backends.
In summary, serverless architecture is ideal for event-driven, short-lived computing tasks. It works well for building APIs, processing data, and handling IoT events. The benefits of reduced costs, flexible scaling, and faster development make it an appealing choice for both startups and enterprises.

Final Thoughts

There are numerous benefits of serverless architecture for those looking to build flexible, scalable applications without the burden of infrastructure management. 

By leveraging serverless, you can focus more on writing code while automating resource provisioning, scaling and availability. While it’s not a panacea, serverless presents an intriguing option for startups and enterprises aiming to accelerate development and reduce costs.