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Definition: serverless computing

A cloud computing service in which the customer pays for each function executed rather than a full server or part of a server (a virtual machine) that may be idle periodically. For example, the time required to execute the code that updates a record in a database would be charged to the serverless computing customer.

Servers are indeed used, but the term implies "function as a service" (FaaS) rather than "infrastructure as a service" (see IaaS) or "platform as a service" (see PaaS). See cloud computing and virtual machine.