What is the purpose of AWS Lambda?

The purpose of AWS Lambda is to provide serverless compute power, which allows developers to run code without the need to provision or manage servers. With Lambda, you can execute your functions in response to specific events, such as changes in data within AWS services or HTTP requests via API Gateway. This event-driven architecture means that you only pay for the compute time that your code consumes, making it a cost-effective solution for many use cases.

AWS Lambda enables you to focus solely on your code, as it handles the underlying infrastructure, scaling automatically in response to the number of incoming requests. This approach not only streamlines deployment and management but also helps in building applications that can respond rapidly to events and scale seamlessly.

In contrast, other options like running applications in virtual machines do not align with the serverless paradigm that AWS Lambda represents. Managing database transactions and monitoring cloud costs, while important functions, are outside the core responsibilities of Lambda, as it specifically addresses compute needs in a serverless context.