How can organizations benefit from full-stack observability?

New Relic published the 2022 Observability Forecast report, which captures insights into the current state of observability, its growth potential, and the benefits of achieving full-stack observability.

As IT and application environments increasingly move toward complex, cloud-based microservices, the research found technology professionals have bold plans to ramp up observability capabilities to get ahead of issues that could impact customer experience and application security. Nearly three-quarters of respondents said C-suite executives in their organization are advocates of observability, and 78% of respondents saw observability as a key enabler for achieving core business goals, which implies that observability has become a board-level imperative.

This Observability Forecast from New Relic and ETR had 1,614 respondents, including 1,044 practitioners — day-to-day users of observability tools — and 570 IT decision-makers across 14 countries to understand their current use of observability tools and approaches, as well as their perspectives on the future of observability.

The report also reveals the technologies they believe will drive further need for observability and the benefits of adopting an observability practice. For example, of those who had mature observability practices, 100% indicated that observability improves revenue retention by deepening their understanding of customer behaviors compared to the 34% whose practices were less mature.

According to the research, organizations today monitor their technology stacks with a patchwork of tools. At the same time, respondents indicated they longed for simplicity, integration, seamlessness, and more efficient ways to complete high-value projects. Moreover, as organizations race to embrace technologies like blockchain, edge computing, and 5G to deliver optimal customer experiences, observability supports more manageable deployment to help drive innovation, uptime, and reliability.

The state of observability

• Only 27% had achieved full-stack observability by the report’s definition – the ability to see everything in the tech stack that could affect the customer experience. Just 5% had a mature observability practice by the report’s definition.
• 33% of respondents said they still primarily detect outages manually or from complaints, and 82% used four or more tools to monitor the health of their systems.
• 52% of respondents said they experience high-business-impact outages once per week or more, and 29% said they take more than an hour to resolve those outages.
• Just 7% said their telemetry data is entirely unified (in one place), and only 13% said the visualization or dashboarding of that data is entirely unified.
• 47% said they prefer a single, consolidated observability platform.
• Respondents predicted their organizations will most need observability for artificial intelligence (AI), the Internet of Things (IoT), and business applications in the next three years.

“Today, many organizations make do with a patchwork of tools that require extensive manual effort to provide fragmented views of their technology stacks,” said Peter Pezaris, SVP, Strategy and User Experience at New Relic. “Now that full-stack observability has become mission critical to modern businesses, the Observability Forecast shows that teams are striving to achieve such a view so that they can build, deploy, and run great software that powers optimal digital experiences.”

Achieving full-stack observability

Among the report’s key takeaways, the data supports a strong correlation between achieving or prioritizing full-stack observability and experiencing fewer outages, improved outage detection rates, and improved resolution. For example, 34% of respondents who indicated that they had already prioritized or achieved full-stack observability were also less likely to experience the most frequent high-business-impact outages (once per week or more), compared to the 52% who had not.

In addition, 68% of respondents who said they had already prioritized or achieved full-stack observability also said it takes less than 30 minutes to detect high-business-impact outages, compared to the 44% that had not.

The research implies that the ideal state of observability is one where engineering teams monitor the entire tech stack in all stages of the software development life cycle, employ mature observability practice characteristics, and have unified telemetry data and a unified dashboard or visualization of that data — ideally in a single, consolidated platform. 47% of respondents said they prefer a single, consolidated platform, yet just 2% said they use one tool for observability.

Survey respondents said some of the main challenges preventing them from achieving full-stack observability are a lack of understanding of the benefits, too many monitoring tools, un-instrumented systems, and a disparate tech stack.

Benefits of observability

According to the Observability Forecast, developers and engineers seek solutions that will make their lives better and easier. When New Relic and ETR asked practitioners themselves how observability helps developers and engineers the most, they found:

• 36% believe observability increases their productivity and enables them to find and resolve issues faster.
• About three in 10 said observability enables cross-team collaboration (32%) and improves their skillset or hireability (31%).
• 28% felt that it increases their ability to innovate.

Ambitious deployment plans

When asked about the top trends driving observability needs at their organizations, respondents said risk mitigation, cloud-native application architectures, customer experience, and adoption of open-source technologies were among the highest drivers. Challenges aside, respondents see observability’s bottom-line benefits and expect to deploy additional observability capabilities — including AIOps, alerts, and serverless monitoring — in the next three years (the report focuses on 17 capabilities in all).

• Just 3% indicated that their organizations have all 17 observability capabilities deployed.
• By 2025, nearly all respondents expected to deploy capabilities like network monitoring, security monitoring, and log management, as well as less common capabilities like Kubernetes monitoring, with the majority indicating they would have 88–97% of the 17 observability capabilities deployed. This finding suggests that most organizations will have robust observability practices in place by 2025.

“Observability by its very nature must look at the full stack of data available. Looking at a single layer provides only a silo view. To deliver the digital experience necessary to remain competitive, enterprises must go beyond infrastructure and make their digital business observable,” Gartner, Innovation Insight for Observability, By Padraig Byrne and Josh Chessman, Refreshed 9 March 2022.

Market opportunities

As they pursue aggressive observability capability deployment plans, 72% of respondents expected to maintain or increase their observability budgets next year. 52% of respondents, including 57% of C-suite executives, expected observability budgets to increase over the next year. This includes 14% of all respondents and 16% of C-suite executives who expected to increase budgets significantly or extensively — and the market opportunity is sizable.

Looking ahead, respondents foresee their organizations needing observability for a variety of trending technologies, including AI, 5G, and Web3. C-suite executives anticipate needing observability most for AI (51%), IoT (48%), edge computing (38%), and blockchain (36%) in the next three years.