It's more of an open question and I'm just hoping for any opinions and suggestions. I have AWS in mind but it probably can relate also to other cloud providers.
I'd like to provision IaaC solution that will be easily maintainable and cover all the requirements of modern serverless architecture. Terraform is a great tool for defining the infrastructure, has many official resources and stable support from the community. I really like its syntax and the whole concept of modules. However, it's quite bad for working with Lambdas. It also raises another question: should code change be deployed using the same flow as infrastructure change? Where to draw the line between code and infrastructure?
On the other hand, Serverless Framework allows for super easy development and deployment of Lambdas. It's strongly opinionated when it comes to the usage of resources but it comes with some many out-of-the-box features that it's worth it. It shouldn't really be used for defining the whole infrastructure.
My current approach is to define any shared resources using Terraform and any domain-related resources using Serverless. Here I have another issue that is related to my previous questions: deployment dependency. The simple scenario: Lambda.1 adds users to Cognito (shared resource) which has Lambda.2 as a trigger. I have to create a custom solution for managing the deployment order (Lambda.2 has to be deployed first, etc.). It's possible to hook up the Serverless Framework deployment into Terraform but then again: should the code deployment be mixed with infrastructure deployment?
It is totally possible to mix the two and I have had to do so a few times. How this looks actually ends up being simpler than it seems.
First off, if you think about whatever you do with the Serverless Framework as developing microservices (without the associated infrastructure management burden), that takes it one step in the right direction. Then, what you can do is decide that everything that is required to make that microservice work internally is defined within that microservice as a part of the services configuration in the serverless.yml, whether that be DynamoDB tables, Auth0 integrations, Kinesis streams, SQS, SNS, IAM permissions allocated to functions, etc. Keep that all defined as a part of that microservice. Terraform not required.
Now think about what that and other microservices might need to interact with more broadly. They aren't critical for that services internal operation but are critical for integration into the rest of the organisations infrastructure. This includes things like deployment IAM roles used by the Serverless Framework services to deploy into CloudFormation, Relational Databases that have to be shared amongst multiple services and resources, networking elements (VPC's, Security Groups, etc), monolithic clusters like ElasticSearch and Redis ... all of these elements are great candidates for definition outside of the Serverless Framework and work really well with Terraform.
Any resource would be able to connect to these Terraform defined resource as needed, unlike that hard association such as Lambda functions triggered off of an API Gateway endpoint.
Hope that helps