Function-as-a-Service (FaaS) Market Insights - 2026
The global Function-as-a-Service market size was valued at $3,017.00 million in 2018, and is projected to reach $24,007.00 million by 2026, registering a CAGR of 29.7% from 2019 to 2026. Function-as-a-service is a cloud computing model that allows consumers to develop various application and deploy functionalities without having a proper server with increase in process efficiency. This technology enables developers to use backend services on a flexible pay-as-you-go basis, as they are only charged based on their computation and pay for a fixed amount of bandwidth. The function-as-a-service is one of the fastest growing cloud service models, as the technology has reduced the need to maintain physical infrastructure and systems software.
By user type, the developer-centric segment garnered major Function-as-a-Service market share in 2018 and is expected to remain dominant during the forecast period owing to numerous benefits provided by the FaaS to the developer centric user such as no server management, flexible scaling, optimized cost and automated high availability propels the growth of the market. However, the operator-centric segment is expected to witness highest CAGR in the upcoming years owing to increase in adoption of cloud computing architecture is expected to increase by network operators as it solves heavy computation problems which fuels the growth of the Function-as-a-Service market.
By User Type
Operator-Centric user type would exhibit the highest CAGR of 31.3% during 2019-2026.
By deployment model, the public cloud segment dominated the Function-as-a-Service market share in 2018 and is expected to remain dominant during the forecast period. However, the hybrid cloud is expected to witness highest growth rate in the upcoming years as companies are adopting hybrid cloud for improving their business and to provide faster delivery of services. In addition, it offers numerous benefits which include flexibility to the data stored and providing advance level of security to the data.
By Deployment Model
Hybrid Cloud would exhibit the highest CAGR of 34.8% during 2019-2026.
North America dominated the Function-as-a-Service market in 2018 and is expected to remain dominant during the forecast period as it is the most advanced region in terms of technology adoption. Moreover, major market players such as, Google, Amazon, and Microsoft are strengthening their serverless offerings in this region, which is also one of the major factors fueling the market growth in North America. Furthermore, growth in demand for scalable and cost-effective computing is also boosting the market growth in this region. However, Asia-Pacific is expected to grow at the highest CAGR during the forecast period owing to increase in cloud adoption in Asia-Pacific countries such as China, India, and others.
By Industry Vertical
BFSI segment is dominating the market and is expected to garner highest revenue during the forecast period with $4,055 million revenue in 2026.
The report focuses on the growth prospects, restraints, and trends of the Function-as-a-Service market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global market.
Asia-Pacific would exhibit the highest CAGR 34.1% during 2019-2026.
The global Function-as-a-Service market is dominated by the players such as Amazon Web Services, Google LLC, IBM Corporation, Microsoft Corporation, Oracle Corporation, Tibco Software Inc., SAP SE, Infosys Limited, Rogue Wave Software, Inc. and Dynatrace LLC. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Top Impacting Factors
Current and future Function-as-a-Service market trends are outlined to determine the overall attractiveness of the market. Top impacting factors highlight the FaaS market opportunity during the forecast period. The growth of the market is driven by rise in need to eliminate server management challenges and rapid growth of the app development market along with shift from DevOps toward serverless computing drives the growth of the market. However, issues associated with third-part APIs such as lock-in problems, security & compliance concerns and other architectural complexities hinders the growth of the market. Furthermore, high growth of cloud-based services and rise in IoT-based devices are expected to present major opportunities for the Function-as-a-Service market growth during the forecast period.
Rising shift from DevOps to serverless computing
Though DevOps is considered as one of the widely used practice of integrating development and operations, however its implementation is sometimes considered as troublesome. These issues associated with DevOps have led to the increase in shift to serverless computing.
This growth in technology is widely chosen among developers as there is no need to worry about execution of code. In addition, there is no need for a direct access to the operating system to manage the code. This attracts large developers as they are able to focus solely on coding of the applications. In addition, it allows developers to use reusable code everywhere, which thus, eliminates the issues such as network troubleshooting. The drag-and-drop interface options allow fast use of reusable code that can shorten both the development and testing cycles. As time is considered important in modern day continuous release cycles, a reusable code strategy achieved through serverless computing dramatically improves developer time and resource economies of scale. As a result, developers are constantly adopting serverless computing; thus, driving the growth of the global Function-as-a-Service market.
Emergence of function-as-a-service applications in growing IoT landscape
Rapid technological developments and innovations have led to the transformation of several industries into a data-driven paradigm, which has opened up vast opportunities. In addition, significant increase in IoT adoption is supported by organizations, which are transforming their business through this technology for device integration and management to enhance productivity and cost-efficiency. Serverless computing has found several applications such as data processing, in the growing IoT landscape.
Impact of COVID-19 on Function-as-a-Service (FaaS) Market:
- The demand for function-as-a-service is expected to surge during the Covid-19 pandemic to develop, run, and manage application functionalities by avoiding the building and maintaining the complex infrastructure to facilitate ‘work from home’ facilities.
- Function-as-a-service has been adopted by the IT industry as it provides serverless computing via serverless architecture in the lockdown period to continue all the operations smoothly and securely.
Key Benefits for Stakeholders:
- This study presents the analytical depiction of global Function-as-a-Service market trends and future estimations to determine the imminent investment pockets.
- A detailed analysis of the Function-as-a-Service market segment measures the potential of the market. These segments outline the favorable conditions for the market.
- The report presents information related to key drivers, restraints, and opportunities.
- The current market is quantitatively analyzed from 2018 to 2026 to highlight the financial competency of the industry.
- Porter’s five forces analysis illustrates the potency of buyers & suppliers in the Function-as-a-Service industry.
Function-as-a-Service Market Report Highlights
By User Type
By Deployment Mode
By Organization Size
By Industry Vertical
Key Market Players
Rogue Wave Software, SAP SE, TIBCO Software Inc., Infosys Limited, Google LLC, Amazon Web Services, Inc., Oracle Corporation, International Business Machines Corporation, Microsoft Corporation, Dynatrace LLC
In accordance with several interviews that were conducted of the top level CXOs, the adoption of function-as-a-service has increased over a period of time for isolating high volume of data and improving the velocity of the software developers. Function-as-a-service allows software developers to develop application and deploy functionalities without maintaining a server. This technology is highly scalable and reduces the server management burden from the developers, which are the major factors that are driving its adoption among developers. Rise in need to eliminate server management and rapid growth of the app development market along with shift from DevOps toward serverless computing drives the growth of the market. However, issues associated with third-part APIs such as lock-in problems, security & compliance concerns and other architectural complexities hinders the growth of the market. Furthermore, high growth of cloud-based services and rise in IoT-based devices are expected to present major opportunities for the market growth during the forecast period.
The function-as-a-service market is consolidated with the presence of key vendors such as Amazon Web Services, Microsoft Corporation, IBM Corporation, and others, which constitute a large share. North America and Europe are the major shareholders of the function-as-a-service market, owing to early adoption of cloud-based services across. However, Asia-Pacific is expected to attain significant opportunities in the near future, owing to increase in cloud adoption, growth in IoT landscape, well-established telecommunication industry, and rise in the application development market in developing countries such as China, India, and others.