The rise of technology has pushed businesses to optimize their digital experience. It doesn’t matter whether you are a startup or a well-established enterprise; if you want to stay relevant, you have to be quick enough to deliver flawless user experience.

In this fast-paced world, monitoring applications are a critical aspect of a smooth-running business. This guide will give a clear understanding of what application performance monitoring is, how it works, and why it's essential in today's world.

What is APM?

Application performance monitoring (APM, for short) is the practice of using real-time data to track an application’s performance and the digital experiences of your end users. The goal of APM is to detect and diagnose complex application performance problems to ensure that applications can meet their expected level of service.

The terms “application performance monitoring” and “application performance management” are often used interchangeably, and you may also see terms like performance monitoring or application monitoring used as well.

Today's enterprise applications are often highly distributed, making errors and performance issues harder to track without an APM solution.

The growing need for application performance monitoring

Nobody wants to deal with a broken or slow app, whether that’s end users or the teams maintaining and building an application. As technology evolves rapidly, customer expectations for seamless, fast, and reliable digital experiences do as well. Cloud computing, mobile applications, and IoT devices have made the IT landscape more distributed and intricate, making maintaining application performance even more challenging. However, with an APM tool, you can sidestep that complexity and proactively monitor, diagnose, and optimize the performance of your application. This gives you the time and confidence to identify and resolve issues before they impact your end user while strategically make decisions to improve efficiency, reduce costs, and enhance customer satisfaction. The dependency on digital services and complexity will only continue to make APM an indispensable element of a modern IT strategy.

The benefits of APM

Now, you may now understand the need for APM, but the benefits can connect all the dots for you, making investing in an APM tool a no-brainer. It’d be easy to continue, but let’s dive into the clear-cut benefits you can reap from APM.

Exposes the root cause of issues

Finding the root cause of software bugs and performance issues is often like peeling an onion - each layer you remove simply reveals another beneath it. APM simplifies this by tracing requests across every component of your full stack. Rather than getting bogged down in surface-level errors, APM illuminates the deep, underlying drivers of issues. With code-level insights, you can pinpoint bottlenecks, inefficiencies, and problematic dependencies no matter where they originate - your own application, infrastructure, or third-party services

A unified full-stack view cuts through complexity

APM gives you deep code-level insights and visibility into all application components - web services, databases, caching layers, third-party APIs, infrastructure resources, etc. You can see the interactions between components.

Reduces revenue loss from downtime/degradations

Even short outages or slow response times can have major revenue implications for modern digital businesses. Customers simply won't tolerate laggy pages, error messages, or failed transactions - they'll abandon shopping carts, bounce from your site, and take their business elsewhere. By maintaining a consistently reliable, high-performance experience, you avoid potential losses from abandoned purchases, failed conversions, compliance penalties, and customer dissatisfaction that can irreparably damage your brand's reputation

Improves resource utilization and right size infrastructure

With APM's granular visibility into application performance across the full stack, it becomes clear when infrastructure is over-provisioned and underutilized - a surefire way to overspend on cloud costs.  Conversely, APM data illuminates when workloads have maxed out server capacity and additional resources are needed. This situational awareness allows you to continuously right-size infrastructure up or down as demands fluctuate. With those insights, you can refactor code and fine-tune configurations to get maximum performance out of your existing infrastructure investments. Whether running on-prem or in the cloud, APM empowers organizations to avoid over-provisioning and eliminate resource waste.

Improves end user experience

End users expect speed and reliability when they use web applications. They want optimized performance and fast response times.

Users will abandon a website within seconds if it’s not loaded. Even worse, if someone has a bad user experience, they’re more likely to move on to a competitor. A Forbes study suggests that 12% of users would actually warn friends and family against engaging with a particular app or site, which can have a detrimental impact on business success, customer satisfaction, and brand reputation.

Creates ease for engineering teams

Application performance issues also cause huge headaches for engineering teams. An on-call engineer might get a critical system alert at 3 AM regarding business transactions that leads to entire teams trying to solve a problem in the middle of the night.

It’s even worse when there’s a critical issue that has no context, meaning that engineers aren’t sure where the problem is coming from. The issue might be coming from an API, Kubernetes cluster, cloud service, or any number of other locations from code to cloud, and the longer it takes to solve, the more it negatively impacts customers and the company’s bottom line.

Application performance monitoring helps engineering teams pinpoint issues quickly—and solve issues proactively. For example, an engineering team could set up a critical threshold that sends an alert when page loading times become too slow, then combine that with detailed tracing to quickly pinpoint the cause and fix it before end users are affected.

The alternative is learning about the issue from end users, which means they are already impacted—and then scrambling to solve the problem without the additional context that application performance monitoring provides, resulting in longer mean time to detection (MTTD) and mean time to resolution (MTTR).

APM can take a large amount of raw telemetry data and correlate it into metrics, patterns, and anomalies, so that engineering teams can quickly find and fix issues.

Core features of APM

At their core, APM tools provide deep visibility into the live performance of your applications and underlying infrastructure, no matter what type of application you are monitoring. This visibility is made possible by a powerful set of monitoring capabilities that work in unison to give you an end-to-end view across your entire technology stack. The key features that make up a comprehensive APM suite are:

Operational dashboards

Operational dashboards provide a high-level overview of how your application is performing. You can customize operational dashboards to display your most important monitoring metrics, ranging from golden signals to custom KPIs to any services you are monitoring.

Real user monitoring

Real user monitoring, also known as RUM, provides insights into what real users are doing in your application, and how well the application is performing for those users.

Synthetic monitoring

Synthetic monitoring involves using a headless browser to mimic the behavior of real users. Practitioners can test specific user flows proactively without relying on data from actual users.

Serverless monitoring

Serverless monitoring allows you to monitor the performance of applications that use cloud-based services such as AWS instead of on-prem servers.

Database monitoring

Database monitoring allows you to monitor the performance of your database so you can determine how long queries are taking..

Mobile monitoring

Mobile monitoring allows you to monitor iOS and Android applications, including latency issues and crash history. 

Infrastructure monitoring

Infrastructure monitoring is necessary for getting insights into how your infrastructure is performing, whether that’s your hardware, cloud infrastructure, or Kubernetes clusters.

Service maps

Service maps allow you to quickly see your application’s connections and dependencies, which is especially important in large applications that use thousands of services.

A good APM solution also gives you the opportunity to query your telemetry data to get deeper insights, examine logs, and use distributed tracing to examine a series of events and find the root cause of any issues.


What are APM solutions?

APM solutions are designed to help businesses monitor and manage the performance of their applications. The variety of solutions and their capabilities have evolved as technology has improved. But basic APM software will be able to gather data on various aspects of an application, such as page loading times, response times, and error rates.

APM tools

A good APM tool should answer the following questions:

  • “Is an application broken or slow?”
  • “If the application is broken or slow, what’s causing the issue?”

DevOps and engineering teams can use APM tools to answer these questions and quickly find and fix issues before they affect real users.

With so many APM tools to choose from, it can be hard to know which is best. The best APM tools will have these key features:

  • Comprehensive visibility into the application’s performance.
  • Real-time monitoring to detect problems swiftly and prevent disruptions.
  • User-friendly design with an intuitive interface and easy navigation for users of different technical levels.
  • Customizable dashboards that can be tailored according to your team’s specific needs and metrics.
  • Proactive alerting capabilities, notifying teams of any issues ASAP.

Application performance monitoring metrics

APM utilizes several key metrics to ensure ideal functionality. These include:

  • Response time: The measure of time taken for an application to respond to the user’s action.
  • Error rate: The frequency of errors generated by the application.
  • Request rate: The number of requests received by an application per unit time.
  • Application availability (AKA uptime): The total time the application is running and available for use.
  • CPU usage: How much resource storage the application is taking up.
  • Application performance index (Apdex) score: The relative performance of the app in comparison to “normal” performance metrics.
  • Service level agreement (SLA) score: Quantifies the level of service a customer can expect from a service provider, outlining specific performance benchmarks that the software application should achieve. This score is calculated using response time, error rate, uptime, and number of requests within a given time period.

Who uses application performance monitoring?

Application performance monitoring is an important practice for all enterprise companies, whether or not they are in the tech industry. Because most companies have a web presence, it’s necessary to monitor the performance of any web assets and the overall experience of their end users. But which teams are using and benefiting from APM?  Use cases can vary based on the size and scope of the application.

  • DevOps engineers automate processes related to testing, deployment, and maintaining applications in production. Application performance monitoring is an essential DevOps best practice.
  • Site reliability engineers (SREs) take a software-based approach to operations. Their work is focused on ensuring that applications are reliable. It’s absolutely essential for SRE teams to use APM to proactively monitor site reliability.
  • Software engineers write code and build new features. At smaller companies, software engineers may be involved in every part of the process, including monitoring code in production. Even at larger companies, engineers are increasingly involved in many parts of the software lifecycle.

How do you get started with application performance monitoring?

In order to integrate application performance monitoring, you need to install agents that track the data flowing through your application. This process is known as instrumentation, and it’s often as simple as using a command line interface (CLI) to automatically install any agents you need. These agents collect and report information on both web and non-web transactions. You can also use custom instrumentation to add additional detail to transaction traces or to block the instrumentation of transactions you don’t want to track. When using a CLI to automate the instrumentation process, you can start sending telemetry data to your APM solution within minutes.

Complex distributed applications use many different services, and ideally, every part of an application should be instrumented. A comprehensive APM tool provides integrations to many popular services such as AWS and Azure, so you can quickly instrument any third-party dependencies in your application.

Ultimately, you can pick and choose which features you need for your application and what exactly you want to instrument. You will see the most benefits from an “all of the above” approach, meaning that you have full end-to-end monitoring, also known as observability, for your applications.

What’s the difference between application performance monitoring and observability?

APM is about monitoring an application’s performance, but many modern application architectures are too complex to monitor and manage with just APM. APM provides a high-level view of how an application is performing, but to get to the root cause of an issue in large, complex applications, it’s necessary to take a more technical approach.

Observability is about having deep, technical insights into the state of your entire system, no matter how large or complex it is. While APM provides aggregated metrics, you also need other tools like distributed tracing to drill down into your data.

Application performance monitoring is one piece of observability, and observability is a superset of APM. With many applications, it’s necessary to have a full observability solution.

To learn more about the differences between APM and observability, see APM vs. observability.

How New Relic can help

Traditional application performance monitoring tools are causing challenges in the new age of technology. That’s why you need to upgrade to the next evolution of APM—New Relic APM 360.

New Relic APM 360 offers real-time insights into critical health metrics across the entire stack and application development lifecycle in one place. With APM 360, your team can prevent issues with a glance at a dashboard, debug faster, and eliminate monitoring gaps through guided workflows and data recommendations.