Step Up to Modern Cloud Development

  • April 19, 2019

Economics and Innovations of Serverless

Chad Arimura
VP of Serverless Advocacy, Oracle

The term serverless has been one of the biggest mindset changes since the term cloud, and learning how to “think serverless” should be part of every developers cloud-native journey. This is why one of Oracle’s 10 Predictions for Developers in 2019 is “The Economics of Serverless Drives Innovation on Multiple Fronts”. Let’s unpack what we mean by economics and innovation while covering a few common misconceptions.

The Economics

Cost is only part of the story

I often hear “cost reduction” as a key driver of serverless architectures. Everyone wants to save money and be a hero for their organization. Why pay for a full time server when you can pay per function millisecond? The ultimate panacea of utility computing — pay for exactly what you need and no more. This is only part of the story.

Economics is a broad term for the production, distribution, and consumption of things. Serverless is about producing software. And software is about using computers as leverage to produce non-linear value. Facebook (really MySpace) leveraged software to change the way the world connected. Uber leveraged software to transform the transportation industry. Netflix leveraged software to change the way the world consumed movies. Software is transforming every major company in every major industry, and for most, is now at the heart of how they deliver value to end users. So why the fuss about serverless?

Serverless is About Driving Non-Linear Value

Because serverless is ultimately about driving non-linear business value which can fundamentally change the economics of your business. I’ve talked about this many times , but Ben nails it — “serverless is a ladder. You’re climbing to some nirvana where you get to deliver pure business value with no overhead.”

Pundits point out that “focus on business value” has been said many times over the years, and they’re right. But every software architecture cycle learns from past cycles and incorporates new ways to achieve this goal of greater focus, which is why serverless is such an important cycle to watch. It effectively incorporates the promise (and best) of cloud with the promise (and learnings) of SOA .

Ultimately the winning businesses reduce overhead while increasing value to their customers by empowering their developers. That’s why the economics are too compelling to ignore. Not because your CRON job server goes from $30 to $0.30/month (although a nice use case), but because creating a culture of innovation and focus on driving business value is a formula for success.

So we can’t ignore the economics. Let’s move to the innovations.

The Innovations

The tech industry is in constant motion. Apps, infrastructure, and the delivery process drive each other forward together in a ping-pong fashion. Here are a few of the key areas to watch that are contributing to forward movement in the innovation cycle, as illustrated in the “Digital Trialectic”:

Depth of Services

The web is fundamentally changing how we deliver services. We’re moving towards an “everything-as-a-service” world where important bits of functionality can be consumed by simply calling an API. Programming is changing, and this is driven largely by the depth of available services to solve problems that once plagued developers working hours.

Twilio now removes the need for SMS, voice, and now email (acquired Sendgrid) code and infrastructure. Google’s Cloud Vision API removes the need for complex object and facial detection code and infrastructure. AWS’s Ground Station removes the need for satellite communications code and infrastructure (finally?), and Oracle’s Autonomous Database replaces your existing Oracle Database code and infrastructure.

Pizzas, weather, maps, automobile data, cats – you have an endless list of things accessible across simple API calls.

Open Source

As always, serverless innovation is happening in the world of open source as well, many of which end up as part of the list of services above. The Fn Project is fully open source code my team is working on which will allow anyone to run their own serverless infrastructure on any cloud, starting with Functions-as-a-service and moving towards things like workflow as well. Come say hi in our Slack.

But you can get to serverless faster with the managed Fn service, Oracle Functions. And there are other great industry efforts as well including Knative by Google, OpenFaas by Alex Ellis, and OpenWhisk by IBM.

All of these projects focus mostly on the compute aspect of a serverless architecture. There are many projects that aim to make other areas easier such as storage, networking, security, etc, and all will eventually have their own managed service counterparts to complete the picture. The options are a bit bewildering, which is where standards can help.


With a paradox of choice emerging in serverless, standards aim to ease the pain in providing common interfaces across projects, vendors, and services. The most active forum driving these standards is the Serverless Working Group, a subgroup of the Cloud Native Compute Foundation. Like cats and dogs living together, representatives from almost every major vendor and many notable startups and end users have been discussing how to “harmonize” the quickly-moving serverless space. CloudEvents has been the first major output from the group, and it’s a great one to watch. Join the group during the weekly meetings, or face-to-face at any of the upcoming KubeCon’s.

Expect workflow, function signatures, and other important aspects of serverless to come next. My hope is that the group can move quickly enough to keep up with the quickly-moving space and have a material impact on the future of serverless architectures, further increasing the focus on business value for developers at companies of all sizes.

A Final Word

We’re all guilty of skipping to the end in long posts. So here’s the net net: serverless is the next cycle of software architecture, its roots and learnings coming from best-of SOA and cloud. Its aim is to change the way in which software is produced by allowing developers to focus on business value, which in turn drives non-linear business value. The industry is moving quickly with innovation happening through the proliferation of services, open source, and ultimately standards to help harmonize this all together.

Like anything, the best way to get started is to just start. Pick your favorite cloud, and start using functions. You can either install Fn manually or sign up for early access to Oracle Functions.

If you don’t have an Oracle Cloud account, take a free trial today.

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