Serverless cloud services are coming, are you ready?

Serverless cloud services are coming and they will change the way we build software and design services. At the same time, they offer totally new business opportunities, especially for growth companies. Scalability is something very real with serverless, but it is not the only interesting aspect.

AWS Lambda, Google Cloud Functions and Microsoft Azure Functions already offer serverless infrastructure, but most companies are still in a very early phase to really utilize it. One factor is the lack of competent and experienced developers. Grow VC Group already offers a trainee program for developers. At the same time, companies haven’t yet been able to properly consider, how to really get business value from serverless solutions.

Serverless means dynamic allocation of server resources, i.e. no need to pay for dedicated servers, but being able to buy computing capacity, and use it, based on actual needs. Serverless models also change software architecture. The microservices model means that each small task or job is a separate function that works independently. This concept makes it easier to implement API services that can execute a process in the background and an API call doesn’t lock any other services. Serverless solutions can also offer better security against some threats. For example, a serverless solution is more immune to distributed denial of service (DDoS) attacks.

​Those are technical benefits, but at the same time, this offers opportunities for new business models. Let’s consider that they:

1. Offer more scalable cloud services so that users only pay for actual use;
2. Offer API’s and micro functions for users to make it easier to develop new services;
3. Offer more distributed services, e.g. from different locations and server centers;
4. Distribute functions and data to several places;
5. New pricing models for services.

These are still very basic cases, and innovative companies with serverless solutions will likely bring entirely new business models and opportunities.

​Micro-functions will probably be the basis for many new opportunities. By offering ready-made micro-functions to other parties and users, they will also become a component to distribute computing and data to many places globally. This is great, for example, for IoT, blockchain and latency critical services.

There is currently a lot of planning and development going into making more distributed services, for example: local AI with local data; smart contracts without central authority; or Edge computing. Some data and computing can be undertaken in user devices, but it is not really the solution for all needs, if solutions need more data, they must be connected all the time or require really high reliability. Then one natural solution is to have more locally distributed cloud services.

Amazon Lambda Layers now offers new opportunities to share common components and code. This includes the opportunity to build services that have a lot of users and can have flexible user-specific and shared components. It enables more local and customer-specific services, but it can open new opportunities for new AI solutions and the development new distributed AI algorithms. 

Serverless has also its own issues. It is still in early phase, and it needs more competent developers, better tools to monitor and debug services and better understanding and models to manage data and security aspects. But especially it needs companies to start utilizing its opportunities and offer real value for serverless service users.

Serverless is a much less hyped new solution than AI, blockchain or Edge. Of course, the full potential of AI will be much larger, but AI is still a very unclear area (at least, how the AI term is used), whereas serverless is very concrete and available now. Many companies have looked at it only from a technical point of view, or how much they can save on server costs. They have ignored that the new model also offers new business opportunities.

2019 will bring much more serverless services and much more companies will start to utilize the technology. It is still hard to say, when business people and startups start to really explore its new business opportunities. It can be the crucial next step to more distributed computing, service and data models.

The article first appeared on Disruptive.Asia.