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Exploring Next-Gen Application Performance Management

Dr. Thomas Mendel Ph.D.

The following is based on excerpts from Research In Action's Vendor Selection Matrix for Next Generation Application Performance Management.

The importance of Application Performance Management is at an all time high. This is a very dynamic market, highly complex and with many different facets. Application Performance Management solutions today have many faces and definitions, few vendors can be compared on an apples to apples basis.

There are more than 400 active software and SaaS vendors generating around $4.6 billion in annual revenue. However, the overall importance of Application Performance Management for the IT Service, Application and Operation Management space as a whole, is still growing every year. This makes it worthwhile to look ahead to see what the future will look like for the Next Generation of Application Management solutions.

The End-User Pain Points Today

The Cloud challenge in the extended enterprise

The Cloud phenomenon is driving investment from IT buyers to address issues in Application Performance Management around new applications in the Cloud, as well as extended real-time and Big Data requirements. More traditional challenges around N-tier Applications and instrumentation, are further exemplified by the Cloud.

More business orientation

DevOps is only the beginning, but already high on the agenda for 2015. As the business becomes more entrenched in Application Management as a whole, business SLAs are a key focal point for 2015 as well.

More integration issues than one can handle

IT decision makers are still struggling with the many areas of integration in today’s Application Performance Management implementations. Very few companies have worked this out completely.The most important integration challenges come from the areas of:

1. Cost

2. Capacity

3. BPM/BTM

4. Business process

5. The CMDB

Requirements for Next Generation APM

In a survey of 1600 IT Managers, respondents were asked: What are the key requirements for a Next Generation Application Performance Management solution? The chart below shows the results.


The Next Generation of APM Solutions

APM is a changing market with new and clearer requirements. Application Performance Management has a long history in many enterprises. Many implementations are already more than 25 years old. Vendors and IT buyers alike a struggling with updating their solution sets to accommodate the quickly changing requirements.

The Next Generation Application Performance Management solutions, however, will be based a clearer set of requirements, making it easier to implement and maintain, as well as to compare vendors.

SaaS will be the future delivery platform. SaaS will be the platform of choice for ROI conscious buyers. Next Generation Application Performance Management will be predominantly a SaaS play. SaaS is now widely accepted. While new players are already predominantly SaaS-only, established players are either revamping their solutions, or are at least offering SaaS options. A much better ROI as well as ease of deploy and upgrade are the major drivers for this.

Next Generation Application Performance Management will be more streamlined. The technical requirements for Next Generation Application Performance Management will ultimately lead to a vendor landscape that is much more comparable than the one in today’s highly fragmented market.

Dr. Thomas Mendel Ph.D. is Managing Director of Research in Action.

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Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...

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Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...

Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...

The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...

The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...

In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...

AI workloads require an enormous amount of computing power ... What's also becoming abundantly clear is just how quickly AI's computing needs are leading to enterprise systems failure. According to Cockroach Labs' State of AI Infrastructure 2026 report, enterprise systems are much closer to failure than their organizations realize. The report ... suggests AI scale could cause widespread failures in as little as one year — making it a clear risk for business performance and reliability.

The quietest week your engineering team has ever had might also be its best. No alarms going off. No escalations. No frantic Teams or Slack threads at 2 a.m. Everything humming along exactly as it should. And somewhere in a leadership meeting, someone looks at the metrics dashboard, sees a flat line of incidents and says: "Seems like things are pretty calm over there. Do we really need all those people?" ... I've spent many years in engineering, and this pattern keeps repeating ...

Exploring Next-Gen Application Performance Management

Dr. Thomas Mendel Ph.D.

The following is based on excerpts from Research In Action's Vendor Selection Matrix for Next Generation Application Performance Management.

The importance of Application Performance Management is at an all time high. This is a very dynamic market, highly complex and with many different facets. Application Performance Management solutions today have many faces and definitions, few vendors can be compared on an apples to apples basis.

There are more than 400 active software and SaaS vendors generating around $4.6 billion in annual revenue. However, the overall importance of Application Performance Management for the IT Service, Application and Operation Management space as a whole, is still growing every year. This makes it worthwhile to look ahead to see what the future will look like for the Next Generation of Application Management solutions.

The End-User Pain Points Today

The Cloud challenge in the extended enterprise

The Cloud phenomenon is driving investment from IT buyers to address issues in Application Performance Management around new applications in the Cloud, as well as extended real-time and Big Data requirements. More traditional challenges around N-tier Applications and instrumentation, are further exemplified by the Cloud.

More business orientation

DevOps is only the beginning, but already high on the agenda for 2015. As the business becomes more entrenched in Application Management as a whole, business SLAs are a key focal point for 2015 as well.

More integration issues than one can handle

IT decision makers are still struggling with the many areas of integration in today’s Application Performance Management implementations. Very few companies have worked this out completely.The most important integration challenges come from the areas of:

1. Cost

2. Capacity

3. BPM/BTM

4. Business process

5. The CMDB

Requirements for Next Generation APM

In a survey of 1600 IT Managers, respondents were asked: What are the key requirements for a Next Generation Application Performance Management solution? The chart below shows the results.


The Next Generation of APM Solutions

APM is a changing market with new and clearer requirements. Application Performance Management has a long history in many enterprises. Many implementations are already more than 25 years old. Vendors and IT buyers alike a struggling with updating their solution sets to accommodate the quickly changing requirements.

The Next Generation Application Performance Management solutions, however, will be based a clearer set of requirements, making it easier to implement and maintain, as well as to compare vendors.

SaaS will be the future delivery platform. SaaS will be the platform of choice for ROI conscious buyers. Next Generation Application Performance Management will be predominantly a SaaS play. SaaS is now widely accepted. While new players are already predominantly SaaS-only, established players are either revamping their solutions, or are at least offering SaaS options. A much better ROI as well as ease of deploy and upgrade are the major drivers for this.

Next Generation Application Performance Management will be more streamlined. The technical requirements for Next Generation Application Performance Management will ultimately lead to a vendor landscape that is much more comparable than the one in today’s highly fragmented market.

Dr. Thomas Mendel Ph.D. is Managing Director of Research in Action.

Hot Topics

The Latest

Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...

In MEAN TIME TO INSIGHT Episode 23, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses the NetOps labor shortage ... 

Technology management is evolving, and in turn, so is the scope of FinOps. The FinOps Foundation recently updated their mission statement from "advancing the people who manage the value of cloud" to "advancing the people who manage the value of technology." This seemingly small change solidifies a larger evolution: FinOps practitioners have organically expanded to be focused on more than just cloud cost optimization. Today, FinOps teams are largely — and quickly — expanding their job descriptions, evolving into a critical function for managing the full value of technology ...

Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...

Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...

The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...

The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...

In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...

AI workloads require an enormous amount of computing power ... What's also becoming abundantly clear is just how quickly AI's computing needs are leading to enterprise systems failure. According to Cockroach Labs' State of AI Infrastructure 2026 report, enterprise systems are much closer to failure than their organizations realize. The report ... suggests AI scale could cause widespread failures in as little as one year — making it a clear risk for business performance and reliability.

The quietest week your engineering team has ever had might also be its best. No alarms going off. No escalations. No frantic Teams or Slack threads at 2 a.m. Everything humming along exactly as it should. And somewhere in a leadership meeting, someone looks at the metrics dashboard, sees a flat line of incidents and says: "Seems like things are pretty calm over there. Do we really need all those people?" ... I've spent many years in engineering, and this pattern keeps repeating ...