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Determining the Total Cost of Ownership of Serverless Technologies when compared to Traditional Cloud

October 21, 2020

Comparing AWS Lambda & EC2 costs

A recent Cloud Foundry global survey of 600 IT decision makers found that 19% of respondents are already using serverless technologies and that the number is expected to increase by 42% in the next two years.

Demand for serverless technologies is on the rise because it provides the opportunity for faster time-to-market, by dynamically and automatically allocating compute and memory based on user requests. While there are organizational benefits of moving to serverless, such as increased velocity to address business opportunities, better planning of infrastructure capacity, etc., this paper focuses only on the cost elements.

We will introduce a Serverless Total Cost of Ownership (TCO) framework to evaluate the true cost of running a net new application using serverless technologies, such as AWS Lambda or Kinesis in comparison to a traditional compute, such as Amazon EC2. The Serverless TCO framework is comprised of three key cost components: infrastructure, development, and maintenance.