Serverless Computing Market by Service Model (Function as a Service, Backend as a Service), Compute (Functions, Containers), Database (Relational, Non-relational), Storage, Application Integration, Monitoring & Security - Global Forecast to 2029
The serverless computing market is projected to grow from USD 21.9 billion in 2024 to USD 44.7 billion by 2029 at a (CAGR) of 15.3% during the forecast period. The serverless computing market is undergoing transformation due to many innovations. An important factor fueling expansion is the broad emphasis on digital transformation across various sectors. This change emphasizes the significance of serverless architectures for facilitating scalable and effective application development. Businesses are turning to serverless solutions to improve resource usage, obtain immediate insights, and align IT infrastructure with strategic goals. Another important factor is the increasing use of hybrid work settings, resulting in a higher need for cloud-native, serverless platforms that support smooth remote collaboration. This pattern is especially noticeable in industries such as manufacturing, construction, and information technology, where dispersed teams require flexible and scalable computing resources to be successful.
Innovations in automation, machine learning, and artificial intelligence are driving significant progress in serverless computing. The performance of applications is being improved by AI-driven analytics and predictive algorithms, allowing for increased precision in forecasting demand, optimizing resources, and making real-time decisions. These technologies help organizations predict problems, make operations more efficient, and adjust resources effectively according to the demand. Automation within serverless environments decreases manual involvement by automating tasks such as resource provisioning, monitoring, and scaling, enabling developers to concentrate on developing and optimizing applications. Moreover, combining serverless computing with ERP systems and other business applications enhances data syncing and offers a holistic perspective on IT and business operations. These advancements are driving the serverless computing sector, helping businesses to quickly adjust to changing demands and stay active in a fast-moving digital environment.
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Serverless Computing Market Dynamics
Driver: Future of microservices lies in serverless and function-as-a-service
Microservices architectures make applications more accessible to scale and faster to develop, enabling innovation and accelerating time-to-market for new features. The on-demand compute resources and serverless architectures will strengthen. Better tooling for rapidly building and deploying microservices will eliminate the need for a significant upfront investment. The number of enterprises currently adopting microservices architecture is relatively low but is expected to increase. For instance, the primary platform provider in the serverless architecture market, AWS, provides a complete platform for microservices. The platform offers integrated building blocks that support any application architecture, regardless of scale and complexity. AWS Lambda is a serverless platform that helps run codes without provisioning or managing the servers. The significant advantages of microservices include better fault isolation, ease of integration, simplification of the application development process, and improvement in overall IT efficiency.
Microservice is more extensive and can do more than a function. A function is a relatively small code that performs only one action in response to an event. Depending on how developers have structured an application, a microservice may perform a single action or multiple actions, similar to a function. Considering this specific difference, microservices and serverless go hand in hand. Organizations often try to get most of the existing technologies to improve efficiency.
Restraint: Loss of control over infrastructure
Cloud Service Providers (CSPs) manage the underlying infrastructure in serverless computing, which means users have limited ability to customize or optimize the infrastructure to meet their specific needs. The services established by CSPs can restrict the flexibility of serverless components, potentially impacting their suitability for particular use cases. Additionally, multiple customers sharing the same serverless architecture may raise security concerns, as the shared environment could increase the risk of data exposure. However, CSPs are addressing these issues by offering serverless solutions within Virtual Private Networks (VPNs), which enhance security by isolating customers' resources and data. This approach helps mitigate potential vulnerabilities and ensures that serverless applications operate within a more secure and controlled environment. Despite these measures, users should remain aware of the limitations and security considerations associated with serverless computing in a multi-tenant cloud infrastructure.
Opportunity: Microservices-based deployment
One of the most crucial trends of this decade is the widespread adoption of containers. Though many do not see the direct connection between containers and serverless computing, it is one of the essential drivers of the new paradigm. Developers build these microservice components without knowing how the code is packed within the container to contribute to the overall application. A microservice-based application software is an assembly of multiple such containers that are orchestrated at runtime to deliver the expected functionality. One of the most mature environments of FaaS is AWS Lambda.
Microservices architectures make applications more accessible to scale and faster to develop, enabling innovation and accelerating time-to-market for new features. The on-demand compute resources and serverless architectures will strengthen. Better tooling for rapidly building and deploying microservices will eliminate the need for a significant upfront investment. The number of enterprises currently adopting microservices architecture is relatively low but is expected to increase. For instance, the central platform provider in the serverless architecture market, AWS, provides a complete platform for microservices. The platform offers integrated building blocks that support any application architecture, regardless of scale and complexity. AWS Lambda is a serverless platform that helps run codes without provisioning or managing the servers. The significant advantages of microservices include better fault isolation, ease of integration, simplification of the application development process, and improvement in overall IT efficiency.
Challenge: Architectural and operational complexity
The application development platform has two widely used architectures: monolithic and microservice architecture. In the former model, the coding segment is complex, while in a microservice architecture, the complexity moves to the interconnection of individual functions. Architectural challenges include handling asynchronous communication, cascading failures, data consistency problems, discovery, and authentication of services.
With a microservices approach, the user does not run a single service but dozens or hundreds of services. Operational challenges include providing resources in a scalable architecture, managing several microservices, monitoring microservices, and integrating platform services. Furthermore, tracking and debugging interactions across the whole system and dealing with the lack of standards and heterogeneous environments are the other significant operational complexities that must be considered for the smooth flow of the execution environment.
Serverless Computing Market ecosystem
Based on the service model segment, the Function-as-a-Service (FaaS) will hold the largest market share during the forecast period.
Function-as-a-Service (FaaS) is a vital element of the serverless computing industry, enabling developers to deploy and execute specific functions in reaction to events without the need to handle the server infrastructure below. FaaS provides essential advantages in stream and batch processing, real-time analytics, and microservices design by offering an adaptable and scalable platform. It also facilitates automation and integration, allowing smooth coordination of tasks and workflows among various systems. With organizations focusing on agility, FaaS has become essential in modern application development, decreasing time-to-market and operational expenses. The increasing demand for scalable, event-triggered solutions makes FaaS crucial for advancing serverless computing.
Based on vertical, healthcare & life sciences will grow at the highest CAGR during the forecast period.
In the healthcare & life sciences sector, serverless computing is changing the way services are delivered and managed, offering unparalleled flexibility and efficiency. This technology holds particular importance in crucial fields such as telemedicine, patient data management, and genomic data processing. Serverless designs simplify the integration and scaling of services, allowing healthcare providers to effectively handle vast data quantities and promptly introduce new features. Implementing serverless computing can allow healthcare organizations to improve patient care quality, handle sensitive health data more efficiently, and accelerate the analysis of complicated genomic information. This method lowers infrastructure expenses, allows for immediate processing and scalability, and backs advancements in patient outcomes and research capabilities.
Based on region, North America holds the largest market share during the forecast period.
The US leads in serverless computing due to its advanced tech infrastructure, widespread use of cloud tech, and culture of innovation. In the US market, there is a significant focus on investing in digital transformation, where serverless computing is increasingly important in cloud strategies for many businesses. Prominent technology centers like Silicon Valley, Seattle, and New York City are embracing serverless technology to enhance scalability, save on costs, and quicken application development and deployment. The top cloud services like AWS, Microsoft Azure, and Google Cloud provide a wide range of serverless options for various industries in the US. The United States also profits from a strong digital infrastructure and favorable regulatory conditions, enabling the quick expansion and advancement of serverless computing. Moreover, the focus on technology-driven projects and digital innovation, along with a proficient IT workforce, also boosts the extensive utilization of serverless computing. With US businesses increasingly seeking adaptable and effective cloud options, the serverless computing market is expected to undergo steady growth due to ongoing technological improvements and increasing interest in flexible and cost-effective solutions.
Key Market Players
The serverless computing market is dominated by a few globally established players such as AWS (US), Microsoft (US), IBM (US), Google (US), Oracle (US), Alibaba Cloud (China), Tencent Cloud (China), Twilio (US), Cloudflare (US), and MongoDB (US), among others. Automated scaling, resource management, cost efficiency, and rapid application deployment drive the global serverless computing market. Increased agility is attained through the capacity to adjust to shifting workloads and demands swiftly. Integrating with current enterprise systems is made more efficient through APIs and service interoperability, while solid security measures, such as encryption and access controls, safeguard sensitive data. Intuitive interfaces and mobile accessibility enhance user experience and management efficiency. Advanced analytics and monitoring tools provide insights into performance and usage. Moreover, the ability to scale and adapt is improved through the integration of multi-cloud and hybrid-cloud functionalities. Vendors ensure their market visibility through the continual development of new features, offering excellent customer support and training, ensuring compatibility with various cloud platforms, and leveraging advancements in cloud technology to offer scalable and secure serverless solutions.
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Scope of the Report
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Report Metrics |
Details |
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Market Size Available For Years |
2019–2029 |
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Base Year Considered |
2023 |
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Forecast Period |
2024–2029 |
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Forecast Units |
Value (USD Million/Billion) |
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Segments Covered |
Service Type, Service Model, Deployment Mode, Organization Size, Vertical, and Region |
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Regions Covered |
North America, Europe, Asia Pacific, Middle East & Africa, and Latin America |
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Companies Covered |
AWS (US), Microsoft (US), IBM (US), Google (US), Oracle (US), Alibaba Cloud (China), Tencent Cloud (China), Twilio (US), Cloudflare (US), MongoDB (US), Netlify (US), Fastly (US), Akamai (US), Digitalocean (US), Datadog (US), Vercel (US), Spot by NetApp (US), Elastic (US), VMware (US), Backendless (US), Faundb (US), Scaleway (US), 8Base (US), Supabase (US), and Appwrite (US). |
This research report categorizes the Serverless Computing market to forecast revenue and analyze trends in each of the following submarkets:
By Service Type:
- Compute
- Serverless Storage
- Serverless Database
- Application Integration
- Monitoring & Security
- Other Service Types
By Service Model:
- Function-as-a-service (FaaS)
- Backend-as-a-service (BaaS)
By Deployment:
- Public Cloud
- Private Cloud
- Hybrid Cloud
By Organization Size:
- Small Enterprises
- Medium Enterprises
- Large Enterprises
By Verticals:
- IT & Telecom
- BFSI
- Retail & Consumer Goods
- Healthcare & Life Sciences
- Government & Defense
- Transportation & Logistics
- Manufacturing
- Other Verticals
By Region:
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North America
- United States
- Canada
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Europe
- United Kingdom
- Germany
- France
- Italy
- Rest of Europe
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Asia Pacific
- China
- India
- Japan
- Rest of Asia Pacific
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Middle East & Africa
- GCC
- South Africa
- Rest of the Middle East & Africa
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Latin America
- Brazil
- Mexico
- Rest of Latin America
Recent Developments:
- In May 2024, Google Cloud and MongoDB collaborated to enhance Gemini Code Assist, improving code suggestions for MongoDB users. This collaboration helps developers rapidly prototype and modernize applications by offering better insights and updates for MongoDB code and best practices.
- In March 2024, Cloudflare launched defensive AI, a tailored security solution designed to protect organizations against AI-driven threats. Defensive AI leverages unique traffic patterns to offer personalized defenses, safeguarding critical applications and networks from evolving risks as AI-enhanced attacks become more sophisticated.
- In January 2024, Alibaba Cloud introduced a serverless version of its Platform for AI (PAI)-Elastic Algorithm Service (EAS) to provide a cost-efficient model deployment and inference solution. Additionally, it has integrated its vector engine technology into products like Hologres, Elasticsearch, and OpenSearch, making large language models (LLMs) more accessible and enabling enterprises to build custom generative AI applications.
- In November 2023, Amazon introduced three new serverless innovations to simplify database and analytics scaling for high-demand use cases. These include Amazon Aurora Limitless Database, which automatically scales beyond a single database's write limits; Amazon ElastiCache Serverless, enabling rapid, scalable cache creation without the need for infrastructure management; and Amazon Redshift Serverless, which leverages AI to predict workloads and optimize resource usage for better cost efficiency. These enhancements are built on AWS' serverless technology, making data management easier and allowing customers to focus on innovation instead of infrastructure management.
- In October 2023, Moody's Corporation and Google Cloud revealed a strategic collaboration to merge Moody's financial analysis skills with Google Cloud's sophisticated generative AI technologies. This partnership is intended to support Moody's clients and staff in leveraging large language models (LLMs) for acquiring fresh financial perspectives and summarizing financial information rapidly.
Frequently Asked Questions (FAQ):
What is Serverless Computing?
Serverless computing, a cloud-based model, enables developers to create and operate applications without the need to handle infrastructure. This method provides a centralized platform for users to deploy code, automatically scale applications, and manage resources with a pay-as-you-go model. Serverless computing enables instant collaboration and ongoing integration through its ability to update and deploy software effortlessly. It links to different enterprise systems using APIs, ensuring effective and efficient processes. Security is ensured by solid measures like encryption and access controls, while cloud-based options offer scalability and flexibility. Sophisticated monitoring and analytics tools provide an understanding of how applications perform and are utilized. Serverless computing improves operational efficiency, speeds up time-to-market, and aligns with business goals by eliminating server management and allowing for automatic scaling, ultimately fostering innovation and cutting organizational costs.
Which country was an early adopter of serverless computing solutions?
The US was one of the first to adopt serverless computing solutions.
Which are the key vendors exploring serverless computing solutions?
Some of the significant vendors of serverless computing solutions across the globe include AWS (US), Microsoft (US), IBM (US), Google (US), Oracle (US), Alibaba Cloud (China), Tencent Cloud (China), Twilio (US), Cloudflare (US), MongoDB (US), Netlify (US), Fastly (US), Akamai (US), Digitalocean (US), Datadog (US), Vercel (US), Spot by NetApp (US), Elastic (US), VMware (US), Backendless (US), Faundb (US), Scaleway (US), 8Base (US), Supabase (US), and Appwrite (US).
What is the total CAGR recorded for the serverless computing market from 2024 to 2029?
The serverless computing market is projected to record a CAGR of 15.3% from 2024 to 2029.
What is the projected market value of the serverless computing market?
The serverless computing market is projected to grow from USD 21.9 billion in 2024 to USD 44.7 billion by 2029 at a Compound Annual Growth Rate (CAGR) of 15.3% during the forecast period.
What are the significant trends in the serverless computing market?
There are multiple essential factors influencing the growth of the worldwide serverless computing market. Cloud-based serverless solutions are becoming more popular, providing adaptable, scalable resources and allowing users to access applications remotely from anywhere. AI and machine learning integration boost performance by automating scaling, predicting analytics, optimizing resources, improving efficiency, and reducing operational expenses. The need for smooth integration with various enterprise systems and services is growing, enabling seamless workflows across diverse business functions. Furthermore, there is an increasing emphasis on solid security protocols, such as encryption and access restrictions, to safeguard confidential information in serverless settings. User-friendly interfaces and accessibility on mobile devices are increasingly necessary for efficient control and surveillance of applications across all devices. Together, these patterns help drive the fast expansion and creativity of serverless computing, meeting the changing requirements of contemporary enterprises. .
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The study involved four major activities in estimating the serverless computing market. We conducted secondary research to gather information on the market, competitors, and parent market. The next stage was to validate these findings and assumptions and size them with industry professionals across the value chain using primary research. Top-down and bottom-up methodologies were used to determine the total market size. We used the market breakup and data triangulation techniques to estimate the market size of the different segments in the market.
Secondary Research
Several sources were used to locate and collect information for this study during the secondary research process. Secondary sources included company annual reports, press announcements, investor presentations, white papers, journals, certified publications, and articles from well-known writers, directories, and databases. Data was also gathered from other secondary sources, such as journals, government websites, blogs, and vendor websites.
Primary Research
Primary sources included industry experts from the core and associated industries, preferred software suppliers, hardware manufacturers, distributors, service providers, technology developers, alliances, and organizations representing all parts of the industry's value chain. In-depth interviews were conducted with primary respondents, including major industry participants, subject-matter experts, C-level executives of important market companies, and industry consultants, to acquire and verify critical qualitative and quantitative data and analyze the market's potential.
We performed primary interviews to gain insights such as market statistics, the current trends disrupting the industry, new use cases applied, revenue data collected from products and services, market breakdowns, market size projections, market predictions, and data triangulation. Primary research also helped me grasp different technology trends, segmentation types, industry trends, and geographies. Demand-side stakeholders, such as Chief Information Officers (CIOs), Chief Technology Officers (CTOs), and Chief Security Officers (CSOs); installation teams of governments/end users using serverless computing solutions and services; and digital initiatives project teams, were interviewed to understand the buyer's perspective on suppliers, products, service providers, and their current use of services, which will affect the overall serverless computing market.
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Market Size Estimation
We estimated and forecasted Serverless Computing and other related submarkets using top-down and bottom-up methodologies. We used a bottom-up approach to calculate the overall market size by analyzing the revenues and offerings of significant market players. This study used data triangulation methods and validation through primary interviews to determine and confirm the precise worth of the whole parent market. We used the overall market size in the top-down process to estimate the size of other particular markets using percentage splits of market segments.
We used top-down and bottom-up approaches to estimate and validate the Serverless Computing market and other dependent subsegments.
The research methodology used to estimate the market size included the following details:
- We identified key players in the market through secondary research. We then determined their revenue contributions in the respective countries through primary and secondary research.
- This procedure included studying top market player’s annual and financial reports and extensive interviews for key insights from industry leaders, such as Chief Executive Officers (CEOs), VPs, directors, and marketing executives.
- All percentage splits and breakups were determined using secondary sources and verified through primary sources.
We estimated and forecasted the Serverless Computing market and related submarkets using top-down and bottom-up methodologies. We used a bottom-up approach to calculate the overall market size by analyzing the revenues and offerings of significant market players. This study used data triangulation methods and validation through primary interviews to determine and confirm the precise worth of the whole parent market. We used the overall market size in the top-down process to estimate the size of other particular markets using percentage splits of market segments.
Serverless Computing Market: Top-down and Bottom-up approaches
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Data Triangulation
After determining the overall market size, the market was divided into segments and subsegments using the previously described market size estimating techniques. Where applicable, data triangulation and market breakup methods were used to complete the whole market engineering process and ascertain the exact numbers for each market segment and subsegment. The data was triangulated by evaluating many elements and trends on the demand and supply sides of the Serverless Computing market.
Market Definition
MarketsandMarkets defines Serverless Computing as “a cloud computing model that allows developers to build and run applications without managing infrastructure. The cloud provider takes care of the provisioning, scaling, and management, and the developers only need to focus on writing code. The market primarily consists of Function as a Service (FaaS), which performs isolated functions in response to events, and Backend as a Service (BaaS), which provides backend services like databases and authentication.
Source: Secondary Research and MarketsandMarkets Analysis
Key Stakeholders
- Function as a Service (FaaS) Providers
- Backend as a Service (BaaS) Providers
- Cloud Service Providers (CSPs)
- Developers and IT Teams
- Independent Software Vendors (ISVs)
- Managed Service Providers (MSPs)
- Consulting and Advisory Firms
- API Management Providers
- Open-Source Communities
- Regulatory Bodies
Report Objectives
- To define, describe, and forecast the global Serverless Computing market based on service type, service model, deployment model, organization size, vertical, and region
- To forecast the market size of the five major regional segments: North America, Europe, Asia Pacific, Middle East & Africa, and Latin America
- To strategically analyze the market subsegments concerning individual growth trends, prospects, and contributions to the total market
- To provide detailed information related to the significant factors influencing the growth of the market (drivers, restraints, opportunities, and challenges)
- To strategically analyze macro and micro markets for growth trends, prospects, and their contributions to the overall market
- To analyze industry trends, patents and innovations, and pricing data related to the Serverless Computing market
- To analyze the opportunities in the market for stakeholders and provide details of the competitive landscape for major players.
- To profile key players in the market and comprehensively analyze their market share/ranking and core competencies.
- To track and analyze competitive developments, such as mergers & acquisitions, product developments, and partnerships & collaborations in the market.
Available Customizations
With the given market data, MarketsandMarkets offers customizations per the company's specific needs. The following customization options are available for the report:
Product Analysis
- The product matrix provides a detailed comparison of each company's product portfolio.
Geographic Analysis
- Further breakup of the Asia Pacific market into countries contributing 75% to the regional market size
- Further breakup of the North American market into countries contributing 75% to the regional market size
- Further breakup of the Latin American market into countries contributing 75% to the regional market size
- Further breakup of the Middle Eastern & African market into countries contributing 75% to the regional market size
- Further breakup of the European market into countries contributing 75% to the regional market size
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Growth opportunities and latent adjacency in Serverless Computing Market