I maintain bare metal, traditional cloud hosting, containers, and serverless (plus "serverless containters") and this is how I think of it:
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Serverless is more like it's running everywhere and nowhere all at once. One line of code might be 3000 kilometres from another.
Serverless just means it's abstracted from the user. You don't choose the hardware or perform updates or maintain it, etc. You don't know which servers it's running on, and you don't care. Neither does your app.
Serverless is just the cloudy boys tricking devs and MBAs into paying 100x for code to run to drop 5% of the workload of maintaining a complaint server somewhere.
They literally managed to convince people to take a free thing like "code can run as many times as you want for nothing" and turn it into "pay us each time code runs so you don't to learn docker."
Marketing makes money.
You might be surprised to learn that there are economies of scale at play here. If you want a managed application that has light traffic, then you can pay less for serverless than you would pay for hardware + wasted hours when the hardware is powered on but serving no traffic.
I agree that there are some companies making poor decisions about which software they run in the cloud though. "Cloud mandates" are really stupid, because they're basically just a trap where cloud providers offer a large amount of free cloud credits to get companies dependent on their platform.
I don't know what you're referring to. Most serverless requires docker, like Fargate ECS. You can even run docker in lambda now.
It's literally the convenience of not having to manage the hardware and pay per use, rather than always on hardware.
Same with serverless PaaS options like Aurora, Dynamo, Rekognition, etc.
That's worth a lot to a lot of people in the industry. Sure, you can save more money by running it on hardware you reserve and maintain, but that's the cost/benefit analysis you need to make on a case by case basis.