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Provider limits
Although serverless claims to work on a share nothing paradigm, the reality is that providers operate in a multi-tenant fashion. To cater to every customer based on a fair usage policy, providers enforce limits to avoid resource hogging.
Limits are typically enforced on the duration of the execution, the size of the function, network utilization, storage capacity, memory usage, thread count, request and response size, and the number of concurrent executions per customer. These limits will be increased as more and more hardware capacity is added, but there will always be a hard stop. Serverless systems need to be designed with these limits in mind.