In this blog, we will define both managed services and serverless technologies and explain the key differences between the two. We will also provide use cases for each to help you decide how to best use each to meet business goals.

You have moved your data and analytics workloads to the cloud—or likely will soon—and are considering how to best take advantage of all it can offer. Do you need to explore managed services? Or perhaps you are thinking about serverless technology? Is there even a difference between managed services and serverless technologies?

There is a difference, and both managed services and serverless technologies can play a critical role in enabling your organization to be more productive and innovative, while also saving money and resources.

What are Managed Services?

Managed services are programs, systems, applications, and servers managed by a third-party. They are meant to provide ongoing maintenance and support so that an organization can focus on core business objectives rather than managing applications and platforms—or even about managing requirements. Managed services typically include contracted service maintenance, upgrades, security patches, etc. and are ideal for organizations that lack (or don’t want to build out and pay for) the in-house expertise or resources to do this themselves.

How Managed Services Can Help Your Business

As you make the move to the cloud, you’ll find that the time, effort, and expertise needed to manage your new environment is a critical component of successful business transformation. And although cloud vendors manage many parts of a cloud environment, you are typically still responsible for building and maintaining your own applications and platforms—which increase in complexity as your data and analytics needs scale.

Managed services can take the pressure off and allow you to focus on what is important— meeting core business objectives and revenue-generating activities.

Unlike managing a specific project which still requires the business to participate with time and resources, a managed services provider takes on the responsibility of ensuring requirements are met and systems are running. Managed services can help your business by:

  • Providing experienced talent while offsetting costs associated with hiring and retaining in-house talent dedicated to managing and supporting your applications and platforms. A managed services provider can provide expertise in more than one application or platform, and you pay a fixed monthly or annual cost for this expertise, depending on the levels of service you select. This expertise allows your in-house team to focus on the business.
  • Being proactive with monitoring for any issues, necessary updates, security patches, and more within your cloud environment. This will allow your IT team to focus on other critical business objectives, while the managed services provider focuses on preventing issues before they occur.
  • Alleviating operational risk by ensuring systems are always running and doing so at optimal efficiency. Managed services provide continuous support for network and infrastructure, scaling to meet demand when it is necessary.

What are Examples of Managed Services Use Cases?

Blue and white diagram showing five use cases for managed services.

Managed services are provided by a third-party—and common uses cases include data and analytics programs, IT and infrastructure management, security management, virtual accounting, customer support, etc.

There isn’t a one-size-fits-all approach to managed services. Depending on your organization’s needs, you can select a managed services level that fits for purpose at the time—and you can even plan to scale it as your business grows. Here are some examples of managed services use cases:

  • Data and analytics program: You can hire a team—as an extension of your organization—to manage your data and analytics needs. The managed services become a function that support your organization’s analytics environment, and depending on how embedded the program is, its services can include everything from day-to-day management of databases and platforms to recurring data strategy assessments, quarterly business reviews, and strategic recommendations to get the most ROI from your data.
  • IT and infrastructure management: A third-party is responsible for managing—maintenance, software testing, patching, implementing updates—your organization’s data centers and infrastructure, as well as implementing and managing back-up and recovery services when there are needs. A managed services provider also takes on the responsibility of making sure everything is running when it needs to be running so that your in-house staff is focused on key business objectives.
  • Security management: This function can be part of IT and infrastructure management, but it can also be a program with a virtual Chief Information Security Officer who will make recommendations on policies, behaviors, performance training, continuous improvements, etc. These managed services focus on monitoring and management of security devices and systems throughout the organization.
  • Virtual accounting department: Typically suited for small to mid-sized businesses, virtual accounting managed services offer accounting management, bookkeeping, month-end reporting, tax reporting, as well as other cumbersome tasks such as payroll processing.
  • Customer support: A managed services provider can take on the role of providing customer support with call centers, or they can offer expertise in building customer support bots or automating email support, among other tasks.

What are Serverless Technologies? 

Unlike managed services that have servers behind the scenes managed by a third-party, serverless technologies (also known as serverless computing) allows you to perform a task or function without the notion of a server.

With serverless technologies you are truly cloud native and completely removed from managing or maintaining any servers, applications, or platforms. Serverless technology is often considered a “function as a service.” Serverless computing enables an organization to run a task only when it is needed without worrying about the underlying infrastructure to support it. The purpose-built code runs on-demand, and the service scales itself up or down as needed.

Serverless computing is the epitome of elasticity—perhaps the ultimate quest of cloud computing.

Many people think of serverless computing as a vehicle for custom-built code in Python, javascript, node.js, or C#, but there are also commercial serverless technologies. Some examples include Google BigQuery, AWS Athena, Azure Cosmos, and Snowflake.

How Serverless Technologies Can Help Your Business

Serverless technologies offer many benefits to organizations. Although the code runs on a server somewhere, there is literally no overhead associated with server maintenance with serverless computing because the underlying servers themselves are transparent. Even the operating system is transparent. As such, serverless technologies also eliminate infrastructure management tasks like capacity provisioning and patching, so you can focus on writing code that serves your business objectives.

Serverless technologies can help your business by:

  • Reducing costs associated with maintenance and server capacity, so you can build, test, and run applications without worrying about server space or cost. Because there is no need to manage or maintain a server, your developers can instead focus on building relevant codes to increase productivity. And because the process only runs when it is needed, you are only paying for when the serverless function runs—down to the millisecond.
  • Automating scalability as your user base grows or usage increases. Serverless technologies enables you to deploy your purpose-built task so that it starts and ends when it needs to, without any interference from you—regardless of volume.
  • Reducing risk by eliminating a single point of failure. Because serverless computing allows you to perform cloud-native functions, your risk is distributed.
  • Simplifying code maintenance because unlike conceiving, testing, and deploying the code in traditional server-hosted apps, serverless computing allows you to make changes in isolated pieces of code.
  • Reducing vendor lock-in and allowing flexibility as your organization’s needs evolve. You can easily migrate from Amazon Lambda to Google Functions—or the other way around, should there be a need for it with a copy and paste of the code.

What are Examples of Serverless Technologies Use Cases?

There are a variety of tasks—across industries and lines of business—that are suited for serverless technologies, especially those that would otherwise require a great deal of computing time and effort. Here are some examples of serverless technologies use cases:

  • Trigger-Based Tasks: Any user activity that triggers an event, or a series of events—such as filling out a form may trigger a lead generation, which may trigger assigning that lead to a sales rep—is a good fit for a serverless workflow. All the work that happens in the backend can be written in code and deployed when needed.
  • Automating Workflows and Repetitive Tasks: Take for example an ELT process. Traditionally, you would need to setup a server, install any necessary software to perform the process, maintain the server and ELT software forever, and then be charged for every second that the server is running—even when it’s not being used—to perform an ELT process. With serverless technologies, you can have a purpose-built ELT code that runs on-demand—completely independent of a server and underlying operating system—and you’re only charged for the time while the process is running. You can have each part of an ELT processes designated as an independent function.
  • Authentication or Single Sign On (SSO): Traditionally, you need a server that runs fulltime for authentication and SSO, but serverless computing can be a mechanism that interacts with your identity provider to authenticate users and generate an access token only when it is needed.
  • Real-Time Analytics Workflows: Your business intelligence (BI) platform responds to user requests and serves up dashboards and visualizations, but what if you wanted to add in a new variable such as a machine learning algorithm to your results. Instead of having a second server dedicated to the machine learning algorithm, you can use serverless technologies to handle the workflow. Whenever the calculation needs to be performed, the serverless function runs it, returns the results, and then shuts down.
  • Application or API Integration: Serverless technologies can be a bridge among applications or API integrations. For example, when system A needs to talk to system B, it can do via serverless tech, on an on-demand basis.

Managed Services or Serverless Technologies—Which Is Right for Your Business?

While in both cases—managed services and serverless computing—you are not managing servers, they each play a unique role in optimizing your resources and reducing overhead. Here are some tips on when to select the right approach for your business:

  • Managed services: If you are new—or planning on moving—to the cloud, managed services is a great choice for your organization. A managed services provider can offer the expertise you need, when you need it, at a fixed monthly rate. Allowing a third party—that has the resources, training, and capacity—to manage troubleshooting certain aspects of your business will allow you to shift your focus to running your business and meeting core objectives along the way.
  • Serverless technologies: If you are already in the cloud and are ready to take the next step to being cloud native, serverless technologies are a great choice for your organization. Not only does serverless computing reduce your reliance on servers and the costs associated with them—it also allows enables elasticity, scalability, faster-time-to-market, and increased productivity within your organization.

You do not need to choose one over the other: managed servers and serverless technologies can be used concurrently to take your business into the next level of cloud maturity. As you think about what approach is right for your organization, assess the capabilities of your existing data stack as well as your data strategy to ensure your plans are aligned with your business goals.


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Patrick Vinton Patrick oversees R&D and is responsible for the technical direction of Analytics8. When he's not working, he's probably playing with his 2 sons. If the kids are with the babysitter, he's sharing a bottle of wine with his wife while binging on Netflix - probably a documentary or historical drama.
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