Is Serverless Expensive? Understanding AWS Serverless Pricing & When It's The Way To Go

A serverless architecture can do wonders for many businesses, but it's definitely not a one-size-fit-all solution. Here's how AWS Serverless pricing works, and how to tell if it's the best choice for you.

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by Matias Emiliano Alvarez Duran

04/26/2024

In recent years, serverless computing has become increasingly popular, changing the way we build and deploy applications. Leading this charge is AWS Serverless, a set of services from Amazon Web Services (AWS) that allows developers to craft and run their apps without having to worry about server management.

But how cost-effective are these infrastructures? In this article, we'll help you understand the pros and cons of going serverless, and explore the scenarios where it offers the most value for businesses, from a financial perspective and beyond!

Understanding AWS Serverless Pricing
Pros and Cons of a Serverless Architecture
How to Know If Serverless Is The Way To Go
Key Takeaways

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Learn more about all the possibilities of AWS Serverless and let's get started!

Understanding AWS Serverless Pricing

Before we start discussing if a serverless architecture is affordable or not, let's have a quick look at how the most popular solution of this kind is priced. AWS Lambda, which is a key component of AWS Serverless, follows a pay-per-use pricing model. In a nutshell, this means you only pay for the compute time consumed by your functions and the number of requests processed. On top of that, other factors such as memory allocation and data transfer will also be added to the overall cost, but the general idea is that you don't have to pay for what's not used.

Is Serverless More Or Less Expensive?

Our best answer would be: it depends!

We'll go into more detail later regarding the cases in which serverless becomes more or less expensive. But, the key thing to understand is that a significant part of this bill has to do with the resources (time, people, money) required to operate the infrastructure. Because “going serverless” doesn't mean that there won't be a server supporting your application, but that you delegate the responsibility of operating the server to the provider company.

Operating a server means doing all the fixing, patching, deploying, as well as ensuring availability, scalability, and security. So if you don't have the skills and resources to tackle all of that, it could be a good option to let AWS handle it.

On the other hand, for those who already have a dedicated and specialized DevOps team, not going down the serverless route could be the right call from a financial perspective. We say from a financial perspective, because there are other elements which you'd need to factor in before deciding. An essential element, for example, is the time required for setting up the infrastructure before you start operating. Depending on the experience of your team and the complexity of the infrastructure, this setup could end up taking months, severely impacting your go-to-market schedule.

The Pros and Cons of a Serverless Architecture

After understanding how AWS Serverless is priced, let's have a look at some of its benefits, but also the potential downsides of choosing this type of infrastructure.

Pros

✅ Only pay for what's used

When comparing AWS Serverless pricing to traditional server hosting costs, the pay-per-use model often proves to be more cost-effective, especially for applications with highly variable demand. Not having to pay for idle time could mean a significant reduction in costs, and you'd still be able to seamlessly handle traffic spikes.

✅ Scale as needed

AWS Serverless offers automatic scaling, allowing your application to seamlessly handle fluctuations in traffic without manual intervention. This scalability ensures optimal performance and cost efficiency, as resources are only provisioned when needed.

✅ Less server management, more coding

By abstracting away server management tasks, such as provisioning, scaling, and patching, AWS Serverless simplifies the development and deployment process. Developers can focus on writing code and delivering features, rather than worrying about infrastructure maintenance.

Cons

❌Execution Time Limit

AWS allows users to set a maximum execution time limit of up to 15 minutes. When this threshold is met, AWS will forcefully halt the function's execution, which makes it less suitable for lengthy processes.

❌Having your strings attached

Embracing AWS Serverless means your application becomes somewhat dependent on the AWS environment, potentially restricting its ability to seamlessly transition to other cloud providers. This vendor lock-in could be an issue for businesses looking for total flexibility, but it's also something that can be overcome with the right strategies (e.g. containers).

❌Potential for unexpected costs

Applications dealing with high traffic or an inefficient code, for example, can run into unexpected costs when using a serverless infrastructure. Going serverless doesn't mean letting things run wild. It's still essential to monitor and optimize your serverless functions if you want to stay efficient and avoid cost overruns.

How to Know If Serverless Is The Way To Go

If you ran through the pros and cons list, but still can't figure out if serverless is the right choice for your project, know that that's totally normal!

Even within the same industry, every business has its own unique needs, so it's really not always that simple. Based on our 10+ years in the development game, we'd say that the best way to make this call is to get advice about your specific case from a crew with a track record of providing top-quality AWS Serverless development services.

But, of course, as your trusty tech sidekick, we'd never leave you hanging like that!

So here are some of the common scenarios in which this type of solution works best, and when it's probably not the right way to go.

When AWS Serverless Could Be a Great Choice

Low to moderate workloads

Applications with low to moderate workloads and intermittent usage patterns are excellent candidates for AWS Serverless. The ability to seamlessly scale guarantees a solid performance, while the pay-per-use billing helps minimize the costs.

Need for speed

AWS Serverless offers a frictionless environment for experimenting and iterating on new ideas, so it's great for prototyping and MVP development, and for when a fast go-to-market is a top priority. Developers can focus on building and validating their product concepts without having to spend any time setting up the infrastructure, provisioning and managing the servers.

Small budgets

A serverless architecture can be particularly advantageous for startups and small businesses, or those with limited budgets. Choosing AWS Serverless eliminates the need for upfront investments in infrastructure, or a full scale DevOps team.

When To Think Twice Before Going Serverless

Consistently High workloads

Applications with consistently high traffic may end up with a large bill to pay if they choose to go for AWS Serverless, in comparison to other hosting options. To keep things cost-effective, you'll be probably better off provisioning and managing dedicated server resources to appropriately meet demand.

Strict latency requirements

In the cases where every second matters, traditional server hosting solutions are likely the safe route, since they may offer a more consistent performance. AWS Serverless has the potential for cold start latency issues, and applications requiring real-time responsiveness or low latency could run into trouble as that would impact performance. However, we normally implement techniques that are used to mitigate this issue, such as function warm up, snap start for Java functions, and container based functions.

Regulatory concerns

Although AWS Serverless' security levels are suitable for most businesses, there are exceptions. Applications within highly regulated industries and dealing with very specific data sovereignty, privacy, or security standards could struggle (or need to take extra steps) to meet them in the AWS environment.

Key Takeaways

In conclusion, in many cases, AWS Serverless offers a cost-effective solution for building and deploying applications without the overhead of managing servers. With a democratic pay-per-use pricing model and automatic scaling capabilities, it can help companies from all sectors focus on innovation and agility, while minimizing costs and operational complexity. But it's still not a silver bullet for all your tech needs.

Before deciding to go serverless, it's essential to consider the specific characteristics of your application, ideally with the guidance of a specialized software development consultancy. With some expert advice and the right tech sidekick in your corner, AWS Serverless can unlock a world of possibilities for your business.