# Development

Serverless Computing: How It Can Reduce Your Infrastructure Costs

Red Rocket TeamJan 6, 20253 min read

What is Serverless Computing in AWS and How Does It Reduce Costs? Serverless Computing vs Traditional Servers Top Advantages of Serverless Architecture for Cost-Efficiency Understanding the Lambda Serverless Architecture: Benefits and Use Cases Common Challenges of Serverless Stack Adoption Is Serverless the Future of Cost-efficient Computing? Final Thoughts

Have you ever wondered how many small companies there are in the world today? According to statistics, about 400 million small businesses are officially registered in more than 190 countries. Together, they provide more jobs than large corporations. However, what sets them apart from the giants in the market? They often don't have a lot of capital, so they can't grow at a fast pace. This encourages small business owners and startups to look for new and cost-effective solutions.

This applies to many aspects of business operations, including IT infrastructure. Today, any company that aims to succeed must have an online presence. Entrepreneurs usually choose between traditional websites, mobile apps, and web applications. However, building a strong team of developers is not enough for effective results. You also need to take care of a server that will allow your website to work properly and store data.

One of the best solutions for beginning entrepreneurs and startups is AWS serverless technology. This way, you can significantly reduce costs, forget about many hassles, and get important IT services. This technology has advantages and features, which we will tell you in detail in this article.

What is Serverless Computing in AWS and How Does It Reduce Costs?

Actually, serverless computing is a technology that, in extreme cases, changes the requirements for running your own code. No longer do companies have to have their own physical IT infrastructure or manage a virtual server remotely. All the nuances and hassles are handled by the service provider. Today, there are many such platforms from reliable companies, and one of the most famous is AWS (Amazon Web Services).

You may ask us why you should choose serverless technology at all if there are other options available. The most important feature of this solution is the ability to save a lot of money on IT infrastructure retention and management. Some small companies still have to spend 2-5 thousand dollars a month to maintain their own microservices. By choosing a serverless stack, you can reduce this cost category by up to 80%. Sounds pretty impressive, doesn't it?

Let us explain why it is possible to achieve such a cost-saving effect. It's quite simple – you don't need to spend your capital on buying or fully leasing IT servers. Moreover, companies also often hire specialized outsourcing experts to manage servers correctly.

Serverless Computing vs Traditional Servers

When we talk about traditional servers, we mean that you will have to manage them yourself. In most cases, the only solution is to find an experienced team member for these tasks. Many business owners and managers know very well what we are talking about and this is not a strong point of traditional technologies.

If you do decide to develop serverless applications, then you will have a lot of changes compared to traditional servers. In this case, you don't necessarily need to have any technical knowledge about management or configuration. You get a ready-made platform as a service and all the necessary parameters are managed by the vendor.

Comparing these two popular IT solutions, we are reminded of a very common example. Imagine two identical cars and the only thing that distinguishes them is the gearbox. One car has an automatic transmission, while the other is mechanically driven. In the first case, the car independently carries out a number of tasks for you and provides comfortable conditions. The same can be said about serverless computing technology.

Top Advantages of Serverless Architecture for Cost-Efficiency

Small organizations and IT start-ups will always favor more cost-effective solutions, and it's no surprise. That's why serverless architecture is gaining more and more popularity every year. We've gathered some of the most important factors that make this technology cost-effective.

The pricing model. The main benefit of serverless architecture is how the cost is generated. With this approach, you pay exclusively for the volume you actually use.
No need for additional specialists. As we mentioned above, conventional servers require customization on their own and that's why entrepreneurs hire experts. In the case of AWS, customers get ready-made solutions without the need for customization.
No other maintenance costs. It's no secret that maintaining a traditional physical IT server requires additional costs, including electricity and cooling. Since AWS provides serverless technology, you are exempted from these fees.

This solution will be especially beneficial for those who do not regularly use a large amount of resources. For example, seasonal applications often use this architecture because the load and user traffic are not stable.

Understanding the Lambda Serverless Architecture: Benefits and Use Cases

The idea of running an application without having to manage servers is taken to the level of Lambda serverless architecture. This architecture is built on top of AWS Lambda, which allows you to execute your code in response to any specific event. It may be an API request or a file upload without having to provision or manage infrastructure. The key is its event-driven model — resources are only allocated when they are required, giving a reduced cost and improved efficiency.

Scalability is one of the main advantages of this architecture. AWS Lambda effortlessly scales compute power up or down automatically based on demand — whether you’re serving a single request or millions. Additionally, you only pay for the time you use your code, eliminating costs from unused server capacity.

What use cases of this technology can we talk about? For example, it can handle processing uploaded images in real-time, trigger database updates, or even attach itself to other AWS services such as DynamoDB or S3. With this architecture, businesses concentrate on designing features and delivering value to their users. At this time, AWS handles the cumbersome work of infrastructure, making sure it runs smoothly and cheaply.

Common Challenges of Serverless Stack Adoption

Over the past five years, adoption of such technology has increased significantly and it's all thanks to the benefits of serverless computing. Despite the fact that such technology actually reduces costs for enterprises, implementing serverless technology can be a challenge for several reasons.

Small selection of the right tools. Surely, the serverless architecture makes infrastructure easy, but it often lacks sturdy tooling for monitoring and managing the apps. They are difficult to implement because entrepreneurs often don't find the right technical tools.
Debugging issues. Serverless applications are event-driven and distributed; hence, debugging such applications is really complex. It’s often difficult to trace errors when a function spans multiple services and relies on third-party APIs.
Shortage of qualified personnel. Developers need to move from the mindset of server to serverless. You don’t need to have this level of traditional server management knowledge for serverless environments. Teams have to learn new patterns - things like event-driven programming - and adapt to platform-specific pieces like AWS Lambda.

All of these difficulties seem minimal when you look at the potential this technology can provide for entrepreneurs and digital startups.

Is Serverless the Future of Cost-efficient Computing?

The question «is serverless the future of cost-efficient computing?» increasingly points to a resounding yes. Currently, there is an increase in the usage of serverless technologies as they are the preferred path to take for businesses that want to cut costs and still have the desired performance. Serverless computing greatly decreases operational expenses by eliminating the need to manage servers and provides pay-as-you-go pricing models.

This run is underscored by serverless computing market trends. According to analysts, this serverless computing market is expected to grow an amazing 23 percent per year. Why is it so? Businesses in every industry find that serverless computing improves flexibility, scalability, and cost efficiency. The growing need for agile solutions to support modern, dynamic workloads is driving this growth. Amazon Web Services is also expected to remain the biggest player in this market.

Final thoughts

Now you know more about which solution you should consider instead of physical IT infrastructure. Serverless technology will save you from the need for unnecessary costs, which is especially important for startups. Despite the affordable cost and favorable payment model, the AWS provider will take care of all the configurations on its own, and the capacity will increase in parallel with the increase in server loads. This will keep your app from crashing if it gets a lot more users than usual.