The Role of Observability within Organizations is Changing

As our digital ecosystem has become increasingly interconnected—and fragile—businesses are under more pressure to maintain uptime and reliability. According to the 2024 Observability Forecast, engineering teams spent 30% of their time managing outages, with high-impact outages costing companies at least $1M per hour.

While observability started as a best practice to maintain the performance of systems and software, its role is evolving. Observability isn’t just about avoiding costly downtime. For forward-thinking executives, it’s about gaining a strategic edge. In complex, cloud-driven environments, observability delivers real-time insights into system health, performance, and business outcomes, while also unlocking new levels of innovation, productivity, and operational efficiency.

Here are some key findings from the 2024 Observability Forecast:

AI is driving the need for observability

A notable trend from the report showed that AI is now tied with security as the top driver of observability adoption. This underscores observability’s role in fueling innovation and staying competitive in the digital landscape. Organizations that deployed AI-driven observability reported higher overall business value and return on investment (ROI).

In fact, 41% of respondents cited AI technologies as the primary reason for adopting observability, with 42% deploying AI monitoring, 29% using machine learning (ML) model monitoring, and 24% utilizing AIOps. Those leveraging AI-driven observability reported significantly greater annual value from their observability investments.

Business observability is on the rise

Business observability—the ability to correlate telemetry data with business outcomes—has become a priority for many organizations. The report found that companies already using business observability reported 24% lower hourly outage costs and spent 25% less time addressing disruptions compared to those without it. It’s no wonder that by 2025, 69% of organizations expect to have deployed business observability, with 87% targeting 2027.

Full-stack observability reduces downtime and costs

Organizations using full-stack observability saw significant benefits. They experienced 79% less downtime—equivalent to 70 fewer hours of downtime annually, with 48% lower hourly outage costs compared to those not using full-stack observability. In addition, these organizations spent 27% less on annual observability and were 51% more likely to detect and resolve issues early.

Tool consolidation is accelerating

The trend toward tool consolidation was clear in the report, with a 2-to-1 preference for a single, unified observability platform over multiple point solutions. The number of respondents using a single tool increased by 37% year-over-year, while the average number of tools used dropped by 11%. By reducing the complexity of managing multiple tools, organizations can lower costs and improve the speed and accuracy of insights.

Open-source is present but not dominant

While open-source solutions remain popular for observability, they are not the dominant choice. Over 51% of respondents used open-source for at least one observability capability, but only 1% relied solely on open-source solutions. AI monitoring, synthetic monitoring, and distributed tracing were common areas where open-source was utilized.

Developer productivity gains

Observability isn’t just about technology—it’s about empowering teams. The report found that organizations with robust observability practices improved developer productivity, reducing the time spent addressing disruptions by 44%. By providing actionable insights in real time, observability helps teams resolve issues faster and focus more on driving business growth.

Summary

The 2024 Observability Forecast provides clear evidence of observability's critical role in improving business performance. From reducing downtime and enhancing reliability to empowering teams and fostering innovation, observability has become essential to modern digital strategies. For executives looking to drive growth and operational efficiency, investing in observability is a strategic imperative.