In the industry’s first analysis of serverless cloud pricing, 451 Research has found that, for the majority of new applications, serverless offers a lower cost of ownership (TCO) than virtual machines (VMs) and containers.
When analysing serverless offerings from the big four cloud providers - Amazon Web Services (AWS), Google, Microsoft and IBM - 451 Research’s Cloud Price Index shows that IBM generally offers the least expensive service, with Microsoft leading for certain configurations.
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. As an example scenario: 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 utilization means it is cheaper than using VMs when the code is executed fewer than 500,000 times each month.
451 Research’s Cloud Price Index finds that IBM is cheapest for 0.1-second duration scripts, and Azure is cheapest for 10-second scripts, assuming memory requirements match predetermined size allocations. Plus, 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; 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,” said Dr. Owen Rogers, research director, Digital Economics Unit at 451 Research
“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,” Rogers added.
