10 Key Takeaways from the 2023 Observability Forecast
September 14, 2023

Ishan Mukherjee
New Relic

Share this

Earlier this year, New Relic conducted a study on observability. The company surveyed 1,700 IT practitioners and decision-makers across 15 countries in North America, Europe and the Asia Pacific region to to understand the current state of the practice and the external forces influencing spending and adoption. The 2023 Observability Forecast reveals observability's impact on the lives of technical professionals and businesses' bottom lines.

Here are 10 key takeaways from the forecast:

1. Observability delivers 2x annual ROI

Respondents to the survey receive a median $2 of return per $1 of investment in observability, with 41% receiving more than $1 million total annual value. Almost all (96%) respondents expected a significant negative business outcome without observability — noting higher operation costs and revenue loss from downtime as the concrete financial impacts of not having observability.

2. Outages are expensive - observability is critical

32% of respondents said critical business app outages cost more than $500K per hour of downtime. Although respondents report a median annual outage cost of $7.75 million, those with full-stack observability experience a median outage cost 37% lower than those without full-stack observability.

3. Observability improves service-level metrics

Respondents with full-stack observability are more likely to experience the fastest mean time to resolution (MTTR) and were 19% more likely to resolve high-business-impact outages in 30 minutes or less compared to those without full-stack observability.

4. Observability adoption accelerating

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

5. Organizations want tool consolidation

Tool sprawl remains an obstacle for organizations of all sizes despite a 2-to-1 preference for a single, consolidated platform. However, the proportion using a single tool more than doubled year-over-year, and the average number of tools deployed has gone down by almost one tool.

6. Organizations still haven't fully unified telemetry data

Siloed and fragmented data make for a painful user experience. Among the 40% of respondents who had more siloed data, 68% indicated that they strongly prefer a single, consolidated platform. Respondents with more unified telemetry data were more likely to have fewer high-business-impact outages, a faster MTTD, and a faster MTTR than those with more siloed telemetry data.

7. Security is driving observability adoption

Modern applications typically run in the cloud and depend on hundreds of components, each introducing additional monitoring challenges and security risks. Nearly half (49%) said an increased focus on security, governance, risk, and compliance was driving the need for observability, making it the top choice two years in a row. The security focus reflects the rise of cybersecurity threats and complex cloud-native application architectures.

8. AI and apps are also important to organizations

About two in five (38%) said the integration of business apps into workflows and the adoption of artificial intelligence (AI) technologies was driving the need for observability. The focus on AI and business apps like enterprise resource planning (ERP) and customer relationship management (CRM) makes sense as organizations are competing to attract and retain customers by providing the best customer experience.

9. Clear business benefits of observability

Almost half (46%) of practitioners said observability increases their productivity so they can find and resolve issues faster. About a third (35%) of IT decision-makers said it helps them achieve technical key performance indicators (KPIs) and/or business KPIs (31%). Of the total respondents, two out of five (40%) said improved system uptime and reliability is a primary benefit — 13% more than last year — while 38% cited increased operational efficiency and 34% focused on security vulnerability management.

10. The increase in observability deployment is expected to continue

Most respondents (83%) expected to deploy at least one new capability in the next year, with more than half (51%) of respondents expected to deploy one to five, and nearly a third (32%) expected to deploy six or more. For 2024, at least 90% of organizations expect to deploy capabilities like network monitoring, database monitoring, security monitoring, and alerts. These findings indicate observability's strong growth potential in the near future.

Ishan Mukherjee is SVP of Growth at New Relic
Share this

The Latest

September 21, 2023

Companies implementing observability benefit from increased operational efficiency, faster innovation, and better business outcomes overall, according to 2023 IT Trends Report: Lessons From Observability Leaders, a report from SolarWinds ...

September 20, 2023

IT leaders are driving an increasing number of automation initiatives as a way to stay competitive, reduce costs and scale as they navigate an unpredictable social and economic environment, according to the 2023 State of Automation in IT survey conducted by Jitterbit ...

September 19, 2023

Customer loyalty is changing as retailers get increasingly competitive. More than 75% of consumers say they would end business with a company after a single bad customer experience. This means that just one price discrepancy, inventory mishap or checkout issue in a physical or digital store, could have customers running out to the next store that can provide them with better service. Retailers must be able to predict business outages in advance, and act proactively before an incident occurs, impacting customer experience ...

September 18, 2023
Digital transformation is key to ensuring companies keep up with the competitive market landscape. Putting digital at the core of a business can significantly reduce operating expenses and inefficiencies. However, this process often means changing the way internal teams work with one another. To help with the transition, this blog offers chief experience officers (CXOs) advice on how to lead a successful digital transformation project ...
September 14, 2023

Earlier this year, New Relic conducted a study on observability ... The 2023 Observability Forecast reveals observability's impact on the lives of technical professionals and businesses' bottom lines. Here are 10 key takeaways from the forecast ...

September 13, 2023
On September 10, MGM Resorts experienced what it called a "cybersecurity issue" that had a major impact on the company's systems, showing how cyberattacks can bring down applications, ultimately causing problems for a company in many ways ...
September 12, 2023

Only 33% of executives are "very confident" in their ability to operate in a public cloud environment, according to the 2023 State of CloudOps report from NetApp. This represents an increase from 2022 when only 21% reported feeling very confident ...

September 11, 2023

The majority of organizations across Australia and New Zealand (A/NZ) breached over the last year had personally identifiable information (PII) compromised, but most have not yet modified their data management policies, according to the Cybersecurity and PII Report from ManageEngine ...

September 07, 2023

A large majority of organizations employ more than one cloud automation solution, and this practice creates significant challenges that are resulting in delays and added costs for businesses, according to Why companies lose efficiency and compliance with cloud automation solutions from Broadcom ...

September 06, 2023

Companies have historically relied on tools that warn IT teams when their digital systems are experiencing glitches or attacks. But in an age where consumer loyalty is fickle and hybrid workers' Digital Employee Experience (DEX) is paramount for productivity, companies cannot afford to retroactively deal with IT failures that slow down employee productivity ...