Serverless Computing Is a Paradigm Shift for Cloud Computing
The serverless revolution is akin to delivery companies moving away from owning large trucks to managing a fleet of leased vans, and from there, to outsourcing transportation to a third-party fleet of scooters
That said, in the past year we have seen companies taking microservices to the next level with the advent of serverless computing, which marks a paradigm shift in the world of software development.
Opening up opportunities for increasingly disruptive business modelsFrom a business perspective, serverless technology doubles down on the software as a service (SaaS) business model, as it allows companies to have a more granular level of unit economics based on a user’s interaction with applications. This lays the foundation for new disruptive services that take into account cost, speed, quality of service, and additional metrics that are yet to be unlocked. Early signs of large-scale adoption As serverless architecture is an event-based computing system, it has become an attractive option for companies using it for automated backups, customized log analysis, and the operation of serverless mobile and web websites. Some of the big unicorns including Airbnb, Netflix, and Expedia have already migrated their infrastructure to a serverless setup, and we are seeing many more moving down the same path. Looking forward, we see serverless technology being the driving force behind many emerging tech trends, including API-driven platforms, facilitating voice-operated systems, internet of things (IoT) applications, and even blockchain technology applications where serverless could power off-chain transactions for the execution of smart contracts. Like all new technologies, serverless architecture is not without its challenges. Currently, the ecosystem that supports this distributed architecture is missing essential tools and capabilities that could reduce the barrier to entry, especially for larger organizations. But what we consider to be the most exciting thing on the horizon, is for this growing ecosystem to help facilitate new business models that weren’t previously feasible.
Just as the cloud revolution enabled WhatsApp to reach billions of users and be acquired by Facebook for $19 billion with only 55 employees, if we’re to see a single digit employee startup with a billion users and a multi-billion dollar valuation, it will probably be built on serverless.
Avi Arnon is an associate in the investment team of iAngels, a Tel Aviv-based venture capital and co-investment firm.