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Serverless Architecture Market Size By Service (API Management, Automation & Orchestration, Monitoring, Security, Support & Maintenance, Training & Consulting), By Organization Size (Large Enterprises, SMEs), By Deployment Model (Public, Private, Hybrid), By Application (IT & Telecom, BFSI, Retail, Healthcare, Government, Manufacturing, Media & Entertainment), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

  • Report ID: GMI3796
  • Published Date: Jun 2021
  • Report Format: PDF

Industry Trends

Serverless Architecture Market size exceeded USD 7 billion in 2020 and is poised to register gains at over 20% CAGR from 2021 to 2027. Several benefits provided by serverless architecture such as reduction in cost, easier configuration, and hassle-free troubleshooting of the server compared to the traditional approach is likely to boost the industry growth. The architecture assists enterprises in automated scaling, enterprise-level security, and resource management across geographically dispersed locations. The advancements in cloud technology are driving organizations toward embracing microservices, fueling the demand for serverless architecture solutions.

Serverless Architecture Market

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The serverless architecture industry has received a strong impetus amid the ongoing COVID-19 pandemic. Market acceleration in the serverless architecture space has been substantial as industry verticals are rapidly embracing sophisticated cloud solutions such as containerization, microservices, and Functions-as-a-Service (FaaS). As per the December 2020 data released by Eurostat, approximately 64% of enterprises in Norway leveraged cloud computing services compared to 51% in 2018. The global economy is witnessing industry expansion strategies from enterprises in terms of the post-COVID-19 impact.

The increasing traction of enterprises toward eliminating the complexities associated with server management has emerged as a major driving force behind the serverless architecture market growth. With the proliferation of cloud computing, businesses are pressurized to switch to cost-effective models to ensure profitability and maintain market competitiveness. The pay-as-you-go pricing model and enhanced scalability offered by serverless architecture assist enterprises in reducing the resource allocation and financial expenditure of server management.

High importance on automated orchestration of services to expand UK market size

UK Serverless Architecture Market By Service

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The automation and orchestration segment in UK is set to generate more than USD 400 million in revenue by 2027. Automation helps enterprises to achieve and maintain speed efficiency using software automation tools and by regulating functionalities & workloads on the cloud. Serverless orchestration is easier to manage and upscale compared to other cloud technologies such as Kubernetes. As per the data released by New Relic, a cloud services monitoring provider, nearly 40% of the enterprises in the UK had transitioned to some form of serverless computing in 2020 or are seeking to deploy the same by 2021.

Economies of scale offered by the public cloud model to augment the serverless architecture market growth in the Nordics

Nordics Serverless Architecture Market By Deployment Model

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In the Nordics, the public cloud segment is likely to generate around USD 200 million in revenue in 2022 impelled by the cost benefits of the public cloud over on-premise deployment. The growing demand to reduce investments in infrastructure and equipment compared to private cloud models is enabling enterprises to procure public cloud services. Moreover, the multi-tenancy features of public clouds offer economies of scale with a large number of users sharing computing resources.

The major serverless architecture providers are expanding their business to the Nordics to offer public cloud services. For instance, in June 2020, AWS expanded its presence in Denmark by setting up a new office in the region. The availability of AWS regional office helped the enterprises in the country to improve their public cloud utilization.

High saturation of SaaS models across large enterprises to spur the market expansion in Japan

In Japan, the large enterprises segment is forecast to capture a market share of above 60% by 2027. Large enterprises in the region have been the early adopters of cloud computing due to the extensive use of SaaS models such as CRM and ERP solutions. High spending in cloud computing by large enterprises to accelerate delivery of IT services is driving the serverless architecture market revenue.

Cloud computing among Japanese large enterprises has also been led by the growing demand for replacing legacy on-premise infrastructure. The emergence of a hybrid cloud, which offers enhanced data security with high scalability, has driven large enterprises toward serverless architecture solutions. As large enterprises have robust financial resources, the adoption of private clouds to ensure better data control has witnessed a rapid surge.

Backend-as-a-Service promoting serverless architecture growth across the Brazilian telecom market

The IT & telecom segment in Brazil accounted for about 20% of the serverless architecture market share in 2020. The majority of the companies operating in the IT & telecom industry have transitioned to the cloud infrastructure. The rising proliferation of public cloud and increasing traction of serverless backend-as-a-service are expected to increase profoundly as telecom providers look to leverage their infrastructure for selling hosting services.

The majority of telecom enterprises have large-scale data centers for handling legacy applications and are delivering public cloud offerings through these data centers. The serverless architecture allows companies to eliminate the need for additional resources and reduce the capital expenditure. Enterprise can integrate DevOps and serverless computing processes to achieve fast application development and delivery.

Catalyzed investments across DevOps and cloud technologies will expand North America market share

North America Serverless Architecture Market By Country

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North America serverless architecture market is projected to register over 20% CAGR through 2027. The North America market is characterized by increasing investments in downstream release orchestration and deployment automation capabilities by large corporates to gaining market leverage.

For instance, in January 2020, Sealights raised USD 8.6 million in investments from Cisco and Wipro ventures. This investment was utilized to develop DevOps solutions with AI capabilities. Similarly, the company also launched the Intelligent Test Execution solution for validating the changes made in source codes, thus strongly propelling market statistics.

Dynamic transition toward third-generation serverless architecture to become the key market differentiator

The global serverless architecture market remains highly fragmented with technology giants, such as AWS, Microsoft, Google, and Oracle, holding a major chunk of the industry. Prominent industry players are placing an ever-growing emphasis on delivering advanced serverless architecture solutions that can cater to the dynamic cloud services, especially during peak load requirements.

For instance, in May 2021, Google Cloud announced the availability of DataStream, a serverless replication and Change Data Capture (CDC) service. This addition allows companies to integrate multiple components, such as Cloud SQL, BigQuery, Cloud storage, etc., into Google Cloud services, enabling serverless architecture.

Another major market development includes the release of the Fargate 1.4 by AWS, which is an update to its serverless container platform that adds support for shared Elastic File System storage and removes use of Docker Engine. This update makes it easy to run stateful workloads in container applications. The market has also witnessed several strategic alliances between key players to launch new products with added functionalities and to maintain revenue share & profitability such as the collaboration of Tencent with Serverless, Inc. to improve Tencent’s serverless compute capabilities.

Some of the key serverless architecture market players are Alibaba Group, Alphabet Inc., Amazon Web Services, Inc., Asseco Denmark A/S, Capgemini SE, Cloudflare, Digital Ocean, LLC., Dynatrace LLC., Enfo Oyj, Hexaware Technologies, IBM Corporation, Microsoft Corporation, Nimbella, NTT DATA Corporation, Oracle Corporation, Rackspace, Inc., Redpill Linpro AB, Tencent Holdings Ltd., TIBCO Software, and TietoEVRY.

This market research report on serverless architecture includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2016 to 2027 for the following segments:

Market, By Service

  • API Management
  • Automation & Orchestration
  • Monitoring
  • Security
  • Support & Maintenance
  • Training & Consulting

Market, By Deployment Model

  • Public Cloud
  • Private Cloud
  • Hybrid Cloud

Market, By Organization Size

  • Large Enterprises
  • SMEs

Market, By Application

  • IT & Telecom
  • BFSI
  • Retail
  • Healthcare
  • Government
  • Manufacturing
  • Media & Entertainment
  • Others

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
    • Nordics
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Australia & New Zealand (ANZ)
    • Singapore
  • Latin America
    • Brazil
    • Mexico
    • Argentina
    • Colombia
  • Middle East & Africa
    • Saudi Arabia
    • UAE
    • Israel
    • South Africa
Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The serverless architecture industry share surpassed USD 7 billion in 2020 and will grow at a CAGR of 20% between 2021 and 2027.

In the Nordics, public cloud will generate USD 200 million through 2027 driven by the cost benefits of the public cloud over on-premise deployment.

Automation and orchestration in the UK will record USD 400 million through 2027 given that automation helps enterprises in the achievement and maintenance of speed efficiency using software automation tools and by regulating workloads & functionalities on the cloud.

In Japan, large enterprises will register a share of more than 60% between 2021 and 2027 due to the extensive usage of SaaS models comprising ERP and CRM solutions.

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Premium Report Details

  • Base Year: 2020
  • Companies covered: 20
  • Tables & Figures: 359
  • Countries covered: 22
  • Pages: 270

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