Vercel and serverless explained: benefits, pitfalls and when we choose it

Vercel is a platform that runs modern websites and web applications without you having to manage servers yourself. Serverless functions are the small pieces of code that only run when they're needed. Together they give you fast sites, less maintenance work and systems that scale up on their own. The downside: with a lot of traffic, the costs can climb, and you get used to working with a single provider.

If you're having a website or web application built, you'll run into these terms sooner or later. In this article, you'll read in plain English what they mean, what they do for your business, where the pitfalls are and how we choose for each project.

What is Vercel?

Vercel is a cloud platform for modern websites. In the past, you rented a server, installed software and kept it up to date yourself. Vercel takes that work off your hands: you connect your site's code, and the platform puts it online, keeps it fast and takes care of certificates and security.

Vercel is made by the same company that develops Next.js, one of the most widely used frameworks for websites and web applications. That's why the two work together so smoothly.

What are serverless functions?

The name isn't really accurate: there are still servers. The difference is that you don't have to look after them.

With a traditional server, your application runs day and night, even at three in the morning with no visitors. You pay for capacity you don't use, and an unexpected spike can make it freeze up.

A serverless function is a small piece of code that does one task and sleeps until something happens: a visitor fills out a form, an order comes in or a file gets uploaded. The function wakes up, does its job and stops again. You pay for the time it's working. Well-known examples are AWS Lambda, Google Cloud Functions and Vercel's own functions.

Five benefits for your business

1. Fast load times

Vercel spreads your site across servers worldwide. A visitor gets the page from a server nearby. Fast pages are nicer for visitors, and Google takes speed into account.

2. No server management

No operating system updates, no certificates that expire, no server that crashes in the middle of the night. The hours that saves go to features your business actually gets something out of.

3. Preview first, then live

With every change, Vercel automatically creates a separate preview link. You look at the new version and give feedback before your customers see it.

4. Scale up without stress

If a campaign takes off faster than expected, the platform adds extra capacity in the background. Your site stays up.

5. Security on by default

Protection against attacks that try to take your site down (DDoS) and a firewall are built in by default. You don't have to set that up yourself.

What you do with it in practice

• Processing forms: someone fills out an inquiry, a function checks the details and passes them on to an automation that puts them in your CRM or inbox.
• Passing on orders: an online store reports a new order, and a function gets the details ready for your accounting.
• Heavy tasks in the background: creating PDF reports or resizing images, without slowing down your website.
• Connecting AI: a function sends an incoming email to a language model for a summary and stores the result. Read how to set something like that up in getting an AI application built.

The downsides: what's the catch?

Costs as you grow

The free Hobby plan is only meant for non-commercial use. For business use, you start on Pro, which is billed per team member per month, with usage costs on top. If your application draws a lot of traffic or runs heavy functions, those costs go up. So set a spending limit. Vercel has Spend Management for that.

Cold starts

A function that's asleep needs a fraction of a second to start up when a new request comes in. For processing an invoice, that makes no difference at all. For an application where every millisecond counts, you have to account for it in the design.

Tracking down errors is harder

Instead of one application, you sometimes have dozens of small functions that talk to each other. If something goes wrong somewhere, you need good logs to see where.

Dependent on one provider

The more you use a platform's specific features, the harder it gets to switch later. So keep the core of your logic separate from the platform.

I'd rather build a system that works for you right away than send you a report full of empty promises.

Jesse Scherpen, owner of SharpClicks

Vercel or an alternative?

• Netlify: a direct competitor with a similar approach and a lot of ease of use.
• Cloudflare Pages and Workers: fast, and attractively priced when you have a lot of traffic. Functions run in their own environment that isn't fully the same as Node.js, so not every existing code library works without changes.
• Self-hosting on your own server, for example with Coolify: often the cheapest option in the long run, and you keep full control. You do spend more time on setup and maintenance.

How we choose

• Vercel for websites and web applications in Next.js where speed, little maintenance and fast feedback matter. For most small business sites and customer portals, it's the logical choice.
• Serverless functions for forms, integrations and tasks that run every now and then.
• Your own server for processes that run continuously, move a lot of data or need heavy computing power, like an automation platform or your own language model.

We often combine them: the website on Vercel, the automations on their own server in Europe. Read why that's often the best setup for AI applications in hosting AI agents and language models.

Conclusion

Vercel and serverless functions take server management off your plate, make your site fast and let it grow with you. Keep an eye on the costs, build so you can switch later, and choose your own server where that makes more sense. Then you get the best of both.

Curious which setup fits your project? Book an intro call, or read more about custom software and websites.

Frequently asked questions

What is Vercel?

Vercel is a cloud platform that runs modern websites and web applications without you managing servers yourself. It's made by the developers of Next.js and automatically puts your site online with every change.

What does Vercel cost?

The free Hobby plan is for non-commercial use. For business use, you go with Pro, which is billed per team member per month, plus usage costs such as traffic and functions. With Spend Management, you set a spending limit.

What does serverless mean?

Serverless means your code runs on servers you don't manage yourself, and only when something happens, like someone filling out a form. You pay for the time the code is working instead of for a server that's always on.

What is a cold start?

A cold start is the short startup time of a serverless function that hasn't been used for a while, usually a fraction of a second. For background tasks, that doesn't matter. For applications where speed is critical, it does.

Is Vercel a good fit for a business website?

Yes, for most business websites and web applications built in Next.js. With a lot of traffic or heavy functions, keep an eye on the costs, and choose your own server for processes that run continuously.

How we can help

Custom software. Software that fits the way you work. First working version €5,000 to €7,500.

See the service