2024 Observability Forecast
Published October 2024
Author: Alicia Basteri, Principal Content Manager, New Relic
Executive summary
The 2024 Observability Forecast provides insights into the evolution of observability, identifying key areas of growth and stagnation, and uncovering how external forces are shaping adoption and investment strategies. With input from 1,700 technology professionals across 16 countries, it stands as the largest and most comprehensive study in the observability industry.
With digital experiences and business growth at the forefront for businesses, the findings highlight the tangible business value of observability. IT professionals are seeking ways to reduce unplanned downtime, improve uptime, and boost reliability, all while managing key performance indicators (KPIs) through smarter investments in automation and preventative measures. The report shows that organizations prioritizing observability have a significant advantage when it comes to operational efficiency and overall business performance.
This year’s data reveals that observability delivers a 4x median return on investment (ROI). With 79% less downtime and 48% lower outage costs for those using full-stack observability, the case for investing further in observability has never been stronger.
Furthermore, business observability—the ability to correlate telemetry data with business outcomes in real time—has emerged as a top priority. Organizations that adopt business observability see 40% less annual downtime, 24% lower hourly outage costs, and spend 25% less time managing disruptions compared to those without it.
In addition, the rising adoption of artificial intelligence (AI) technologies—such as AI monitoring, machine learning (ML) model tracking, and AI for IT operations (AIOps)—reflects the growing importance of observability in supporting innovation. Organizations that deploy AI-driven observability report higher overall business value and ROI.
In summary, the report confirms that observability is not just a technical practice, but a strategic imperative that drives measurable business outcomes. By investing in observability, organizations can ensure more reliable digital experiences, achieve operational efficiencies, and set the stage for future growth.
Key findings
The median annual downtime from a high-business-impact outage is 77 hours, or $146 million.
The median total annual downtime across high-business-impact levels was 77 hours (approximately 3 days). That adds up to a median annual outage cost of $146 million. On average, respondents estimated the median percentage of engineering team time spent addressing disruptions is 30%, which is 12 hours based on a 40-hour work week.
Organizations with full-stack observability experience 79% less downtime per year, saving $42 million each year.
On average, those with full-stack observability experience 79% less downtime per year than those without (70 hours compared to 338 hours) and spend 48% less on outage costs per hour ($1.1 million compared to $2.1 million). There’s also a strong association between less downtime and costs and several other factors.
41% of respondents said they plan to consolidate tools in the next year.
There was a 2-to-1 preference for a single, consolidated platform compared to multiple point solutions. In fact, the number of respondents using a single tool increased by 37% year-over-year (YoY). And the average number of tools decreased by 11% YoY. While 45% were still using 5+ tools, 41% said they plan to consolidate tools in the next year.
Median observability ROI is 4x: doubling YoY.
The median annual observability spend across all respondents was $1.95 million. However, the median annual value received from observability was $8.15 million, and the median ROI was 4x. That means the median ROI doubled YoY from 2x to 4x. In addition, those who had deployed at least five observability capabilities estimated a higher annual value received and ROI from their observability investment than those with four or fewer deployed.
Organizations deploying business observability experience 40% less annual downtime.
The ability to correlate business outcomes with telemetry data and report them in real time (business observability) was one of the most important observability vendor criteria—the third choice overall. In fact, 40% had deployed business observability. On average, those who had deployed business observability experienced 40% less annual downtime, spent 24% less on hourly outage costs, and spent 25% less time addressing disruptions compared to those who hadn’t.
Organizations are embracing observability to capitalize on AI technologies.
The adoption of AI technologies was the top strategy or trend driving the need for observability (41%). About two in five (42%) had deployed AI monitoring, 29% machine learning (ML) model monitoring, and 24% AIOps capabilities. Notably, those who deploy these capabilities estimated a higher annual total value received from observability than those who hadn’t deployed them.