Function As A Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The function as a service market is expected to reach a CAGR of 18% during the forecast period (2021 - 2026). FaaS allows cloud service providers to automatically handle the physical hardware, virtual machine operating system, and web server software management. Owing to this, one can solely focus on individual functions in the application code.

Key Highlights

• The growing shift of Development Operations (DevOps) to serverless computing, agility, and scalability, and the maturity of hosted services are the factors driving the growth of the market. Also, companies' inclination towards the optimization of microservices and management of multiple platforms is expected to boost the growth of the market.
• With the emergence of FaaS, the programmable cloud has been rapidly growing for the deployment of applications. According to Oracle, it is estimated that there will be 600 times more sensitive data shared in the cloud. Many cloud providers offer the function as a service such as AWS Lambda, Azure Functions, etc. With these models, developers seek advantage in simple deployments, reduced operation efforts, and pay as you go pricing.
• Moreover, Cisco predicted that by 2021, 73% of the cloud workloads and compute instances is expected to be in public cloud data centers, up from 58% in 2016 (CAGR of 27.5% from 2016 to 2021). This tremendous growth is going to be a catalyst for the function as a service market.
• The outbreak of COVID-19 is likely to boost the investments by companies in IT and cloud resources in the coming years as the companies across various industries have started realizing the benefits and value of cloud computing, even beyond the immediate need for remote work generated by COVID-19 this year.
• The function as a service offers inherent high availability because it is spread across multiple availability zones per geographic region and can be deployed across any number of areas without incremental costs. With this function as a service market is likely to grow over the forecast period.

Key Market Trends

Hybrid Cloud to Drive the Growth of the Market for Security and Privacy Concerned End Users

• The hybrid cloud market is expected to drive the market growth as they are highly used compared to other clouds. Hybrid cloud deployment helps companies to reduce their investment for handling short-term spikes in demand, and in cases when the business needs to free up local resources for more sensitive data or applications.
• With the rise in fluctuating demand for computing and processing, hybrid cloud deployment give companies the ability to scale their on-premises infrastructure up to the public cloud to handle any overflow without giving third-party datacenters access to the entirety of their data. These developments have adequately addressed the concerns of the end-users, who were concerned for their data security and were earlier hesitant to switch to this solution.
• Retailers are continuously seeking to adopt hybrid cloud for their operations. One of the key enterprise cloud computing solution provider - Nutanix have concluded in its recent enterprise cloud index report that, 87.5% of the responding retailers identified hybrid cloud as the ideal IT operating model.
• Companies are continuously seeking opportunities for making mergers and acquisitions to gain more market share in the hybrid cloud market. One recent instance has been the buyout of Red Hat by IBM, which was planned to become an integral part of IBM's hybrid cloud strategy. IBM also plans to move Watson's Cognitive Health Services to the hybrid cloud.

North America to Hold Highest Market Share

• North America holds the highest market share of the market. The region is among the lead innovators and pioneers, in terms of the adoption of new technologies such as 5G, autonomous driving, IoT, Blockchain, gaming, and Artificial Intelligence, among others. This trend is likely to fuel the adoption of function as a service in the region.
• Moreover, the region is the home of FaaS vendors, which adds to the growth of the market. Some of them include IBM Corporation, Microsoft Corporation, Amazon Web Services, Oracle Corporation, etc.
• The growth of new business insights is contributing to the expansion of the market studied in the United States, as many data sources increases. FaaS can also dramatically boost computing performance and can improve the results that directly strengthen business performance. Furthermore, the rise in demand for business agility and flexibility is also increasing the market demand in the region.

Competitive Landscape

The function as a service market is highly competitive due to many players in the market. Players in the market are using various strategies such as new product launches, expansions, agreements, joint ventures, partnerships, acquisitions, and others to increase their market share. Some of the key developments in the market are:

• June 2020 : Microsoft Corporation and NTT DATA Corporation announced an expansion of the alliance with a focus on accelerating enterprise customer’s digital transformation with Microsoft Azure as a preferred cloud solution to help accelerate business and increase workplace productivity.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support