Serverless fits spiky, event-driven, or unpredictable workloads: webhooks, image processing on upload, cron jobs, API backends with uneven traffic, and glue between cloud services. If your traffic is bursty or you are early and do not want to pay for idle servers, scale-to-zero is a real cost win. It also removes patching, capacity planning, and autoscaling config from your plate.
The trade-offs are concrete. Cold starts hurt latency-sensitive paths. Per-request pricing gets expensive at sustained high volume, where a reserved instance or container is cheaper. The stateless, short-lived model rules out long-running jobs, large in-memory caches, and persistent WebSocket connections in many runtimes. You also inherit vendor lock-in, since triggers, limits, and runtimes differ across providers.
A useful rule of thumb: serverless wins when load is intermittent and you value zero idle cost and zero ops, and loses when load is steady and high, latency budgets are tight, or work runs for minutes to hours.