Serverless architecture is a way for companies to build and run applications without managing infrastructure, providing automatic scaling and cost-effectiveness. It allows developers to focus on product development and reduces the need for expertise in server management. The benefits of serverless include improved observability, faster deployments, greater flexibility, reduced architecture costs, and enhanced user experiences. However, it also has limitations such as long-running application inefficiencies, third-party dependency risks, and cold starts. Serverless is suitable for event-driven applications with variable traffic patterns, but its suitability depends on the specific use case and requires careful consideration of new challenges in development and operations.