Serverless architecture allows organizations to focus on building business logic instead of managing infrastructure, as the responsibility for servers, security, and networking is transferred to cloud service providers like AWS, Google Cloud, or Microsoft Azure. The serverless model is event-driven, meaning functions execute only when triggered, making it highly cost-efficient since organizations only pay for actual usage. For example, running 100 million function calls monthly can cost under 300 euros. Despite its relatively short history, serverless adoption is growing rapidly, with about half of AWS users already utilizing Lambda functions. However, serverless architecture also has challenges, including vendor lock-in, stateless execution requiring new thinking, cold start latency issues, and execution time limitations. It works best for processing many small tasks simultaneously rather than large monolithic processes. Good architectural principles and proper frameworks help manage complexity.