First, it's important to understand Vercel's main business model. They have made Next.js free and open-source, not generating direct revenue from the library itself. Instead, their primary revenue stream comes from their hosting and serverless offerings. The recent updates to Next.js, emphasizing server components and fetching data directly from the server, are designed to encourage developers to utilize Vercel's hosting and serverless platform. By promoting this approach, Vercel aims to increase adoption of their paid services and generate more revenue from developers leveraging their CPU runtime and infrastructure. While the App Router in Next.js is a compelling feature, the default behavior of rendering components on the server raises concerns, particularly for small-scale applications. Server-side rendering can lead to inefficient use of CPU resources, as even simple components are rendered on the server, potentially resulting in increased costs and performance issues, especially for those on low-budget or free hosting plans. Personally, I prefer to separate concerns and utilize dedicated backend frameworks like Django or Express for API development, as they are more scalable and better suited for this purpose. Attempting to fetch data directly from the server using Next.js can introduce unnecessary complexity and latency, as the request must first reach the Vercel server, which then proxies or duplicates the request to the actual backend API before returning the response. This additional hop can lead to decreased performance. For applications with an existing backend API hosted elsewhere, I recommend leveraging client-side data fetching, as it streamlines the process and avoids the overhead of server-side data fetching through Vercel's infrastructure. However, it's crucial to ensure that the backend API is properly secured, regardless of the data fetching approach used.