Cloud & Infrastructure · head to head
Lambda (AWS Serverless) vs Neon
Lambda (AWS Serverless)
Cloud & Infrastructure
Run code without thinking about servers
- From
- Free
- Rated
- -
The short version
- Each has a real cost: Lambda (AWS Serverless) billed on two axes at once, $0.20 per million requests plus $0.0000166667 per GB-second of duration, so memory settings change the bill as much as traffic does; Neon compute pricing at $0.106-$0.222/CU-hour means costs scale directly with workload, unlike fixed-price alternatives
- They diverge on capability: Lambda (AWS Serverless) covers Function-as-a-Service, Neon covers Serverless PostgreSQL.
Where they differ
Only the attributes on which Lambda (AWS Serverless) and Neon actually diverge.
| Attribute | Lambda (AWS Serverless) | Neon |
|---|---|---|
| Pricing model | usage-based | Unknown |
| Platforms | Web, Api | Cloud |
| Founded | 2014 | 2021 |
Identical on both: starting price (Free), free tier (Yes), user rating (Not yet rated), category (Cloud & Infrastructure).
What each one covers
Drawn from each product's published feature list. An absence here means we hold no record of it - not that the product lacks it.
Only in Lambda (AWS Serverless)
- Function-as-a-Service
- Event-driven execution
- Auto-scaling
- Pay-per-use
- Multiple languages
- Concurrency limits
- Dead Letter Queues
- Environment variables
Only in Neon
- Serverless PostgreSQL
- Database Branching
- Autoscaling
- Bottomless Storage
- Point-in-time Recovery
- Connection Pooling
- Read Replicas
- Instant Cloning
Both cover
- Cloud deployment
- Web support
What people use each for
The jobs each tool is most often brought in to do.
Lambda (AWS Serverless)
- Event-driven functions without managing serversnot Neon
- API backends behind API Gatewaynot Neon
- Processing S3, DynamoDB, SQS and Kinesis eventsnot Neon
- Scheduled jobs without a always-on instancenot Neon
- Edge compute through Lambda@Edgenot Neon
Neon
- Serverless applicationsnot Lambda (AWS Serverless)
- Development databasesnot Lambda (AWS Serverless)
- Preview environmentsnot Lambda (AWS Serverless)
- Testingnot Lambda (AWS Serverless)
Where each one falls short
Documented limitations, not opinions. Every one is a constraint you would hit in normal use.
Lambda (AWS Serverless)
- Billed on two axes at once, $0.20 per million requests plus $0.0000166667 per GB-second of duration, so memory settings change the bill as much as traffic does
- Provisioned concurrency, used to avoid cold starts, is charged separately at $0.0000041667 per GB-second whether or not the function runs
- Ephemeral storage beyond the included 512 MB is metered
- Lambda@Edge costs $0.60 per million requests, three times the standard request rate
- VPC use and cross-region data transfer carry EC2 charges on top
Neon
- Compute pricing at $0.106-$0.222/CU-hour means costs scale directly with workload, unlike fixed-price alternatives
- Separation of compute and storage may add complexity to cost prediction compared to all-in-one plans
Pricing, plan by plan
Lambda (AWS Serverless)
Free- Free TierFree
- 1M free requests/month
- 400,000 GB-seconds/month
- Always free
Neon
Free- FreeFree
- 100 CU-hours/month
- 0.5 GB storage
- 1 project
- Launch$15/month
- Pay-as-you-go compute
- $0.35/GB storage
- Multiple projects
- Scale$31/month
- Higher compute rates
- 99.95% SLA
- HIPAA compliance
Which should you pick?
Choose Lambda (AWS Serverless) if
- You need function-as-a-service.
- You want to start without paying.
- You work on Web, Api.
- You also want event-driven execution.
Choose Neon if
- You need serverless postgresql.
- You want to start without paying.
- You work on Cloud.
- You also want database branching.
Questions people ask
- Is Lambda (AWS Serverless) or Neon better?
- Neither clearly leads. Lambda (AWS Serverless) starts at Free and Neon at Free, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
- Which is cheaper, Lambda (AWS Serverless) or Neon?
- Lambda (AWS Serverless) starts at Free and Neon at Free.
- Does Lambda (AWS Serverless) or Neon run on more platforms?
- Lambda (AWS Serverless) runs on Web, Api. Neon runs on Cloud.
- Can I use Lambda (AWS Serverless) for free?
- Both have a free tier, so you can try either at no cost before committing.
- What is Lambda (AWS Serverless) best used for?
- Lambda (AWS Serverless) is most often used for event-driven functions without managing servers, api backends behind api gateway, processing s3, dynamodb, sqs and kinesis events, scheduled jobs without a always-on instance. Of those, event-driven functions without managing servers and api backends behind api gateway are not what Neon is typically brought in for.
- What can Lambda (AWS Serverless) do that Neon cannot?
- Lambda (AWS Serverless) covers Function-as-a-Service, Event-driven execution, Auto-scaling, Pay-per-use. Neon covers Serverless PostgreSQL, Database Branching, Autoscaling, Bottomless Storage. Both handle Cloud deployment, Web support.
Answered from the vendors’ own pages
Neon: What is Neon and what makes it different?
Neon is a serverless PostgreSQL database that separates compute and storage, enabling automatic scaling and instant database branching. After acquisition by Databricks in May 2025, pricing has been significantly reduced.
SourceNeon: Does Neon offer a free tier?
Yes, Neon's free tier includes 100 compute units per month and 0.5 GB of storage. This is suitable for development and small projects.
SourceNeon: What are the paid plans and pricing for Neon?
Neon offers consumption-based pricing on Launch ($0.106/CU-hour, approximately $15/month) and Scale ($0.222/CU-hour, approximately $31/month) plans with separate storage billing at $0.35/GB-month. No monthly minimum required.
SourceNeon: What features does Neon provide?
Neon includes git-like branching for database copies, point-in-time recovery, data anonymization for testing, managed authentication, serverless functions, and object storage that branches with projects.
SourceNeon: What compliance and reliability guarantees does Neon provide?
Neon's Scale tier offers 99.95% uptime SLA, HIPAA compliance, SOC2 certification, and private networking via PrivateLink at no extra cost.
Source