The business value of observability: Insights from the 2023 Observability Forecast

By investing in observability, you're not just avoiding potential pitfalls; you're actively driving your business towards greater efficiency, security, and profitability.

The 2023 Observability Forecast report is now out. It's the largest and most comprehensive study of its kind. Data from 1,700 technology professionals across 15 countries offered insights to help you better understand their observability habits and the impact those have on costs and revenue. 

I'll unpack four key findings from the report that show that the return on investment (ROI) in observability is not just beneficial; it's essential.

1. Business value and ROI

The standout theme from this year's report is the tangible business value of observability. Organizations are not just adopting observability for the sake of technology—they're seeing it as a strategic move to achieve core business objectives. The results? Fewer outages, improved service-level metrics, operational cost savings, and increased revenue. 

The numbers speak for themselves. For example, survey respondents indicated a 2x median annual ROI. That means for every dollar invested in observability, organizations are seeing a return of two dollars. An impressive 86% of respondents affirmed the value they receive from their observability investments, with 41% reporting over $1 million in total annual value. This ROI isn't just a number; it's a testament to the transformative power of observability on business, technology, and revenue streams.

Without observability, organizations risk higher operational costs and significant revenue loss from downtime. In fact, respondents cited improved system uptime and reliability (40%),  increased operational efficiency (38%), and enhanced user experience (27%) as primary benefits.

2. The power of full-stack observability

To accelerate digital transformation initiatives, organizations are increasingly monitoring their tech stack end to end.

While most organizations still don’t monitor their full tech stack, this is changing. Full-stack observability increased 58% year over year (YoY). By mid-2026, at least 82% of respondents expected to deploy each of the 17 different observability capabilities. 

The fast adoption of full-stack observability is likely tied to the value it unlocks for organizations. The more capabilities an organization deploys, the greater the value derived from observability. Those with five or more capabilities deployed were 82% more likely to report over $1 million in annual value from their observability investments.  

Organizations that achieve full-stack observability improve service-level metrics as well—particularly mean time to resolution (MTTR) and mean time to detection (MTTD). Respondents who said their organization has more than five capabilities currently deployed were 40% more likely to detect high-business-impact outages in 30 minutes or less, compared to those with one to four capabilities currently deployed. Organizations with full-stack observability had median outage costs of $6.17 million per year compared to $9.83 million per year for those without full-stack observability—a cost savings of $3.66 million per year.

3. Boosting performance and productivity

Increasingly, businesses rely on observability to drive workplace efficiencies, innovation, and agility, and meet customer demands with exceptional digital experiences. 

For practitioners, observability is a tool that boosts productivity, enabling faster issue detection and resolution. For IT decision makers (ITDMs), it's a strategic asset, helping achieve both technical and business key performance indicators (KPIs). About a third (35%) of ITDMs said it helps them achieve technical KPIs and/or business KPIs (31%). Almost half (46%) of practitioners said it increases their productivity so they can find and resolve issues faster.

4. The high cost of ignoring observability

The benefits of implementing observability are clear. What happens when organizations forgo this crucial practice? The 2023 Observability Forecast provides some sobering insights into the business outcomes of not having an observability solution.

A staggering 96% of respondents indicated that the absence of an observability solution would have a significant financial impact on their business outcomes. About three in ten (29%) of respondents cited higher operational costs due to increased operational efforts as the most severe consequence. This was closely followed by 23% who pointed to revenue loss from increased downtime.

Only 3% of respondents felt that the absence of an observability solution would have no impact on their business outcomes. The overwhelming majority of technology professionals recognize the critical role that observability plays in modern business operations.

Conclusion

The data is unequivocal: the absence of an observability solution carries hard financial stakes and can have a ripple effect on other aspects of business, from reputation to competitive positioning. For decision makers, the message is even more transparent. Observability is not a luxury or an optional add-on; it’s a necessity. Businesses must empower every engineer to do better work with data at every stage of the software development lifecycle (SDLC) to improve business outcomes and compete in an increasingly complex digital landscape.
By investing in observability, you're not just avoiding potential pitfalls; you're actively driving your business towards greater efficiency, security, and profitability. As the 2023 Observability Forecast  shows, the return on this investment is not just beneficial; it's essential.