New Relic, the world-renown all-in-one observability platform for every engineer, announced its new research report, 2023 Observability Forecast report, which examines the evolution of observability, its impact on the lives of technical professionals and businesses’ bottom lines.
What were the findings of the report?
The third annual study is once again the most comprehensive of its kind and the only study to open-source its raw data. This year’s report surveyed 1,700 tech professionals, including 1,100 practitioners — day-to-day users of observability tools — and 600 IT decision-makers across 15 countries, to understand the current state of observability, the areas with the most and least amount of growth, and the external forces influencing spending and adoption.
2X return on their observability investment
It reveals observability’s adoption is on the rise in Australia and full-stack observability leads to better service-level metrics, like improved system uptime and reliability as well as security vulnerability management. Although respondents report a median annual outage cost of over AU$11m ($7.37m) in Australia, firms realised a 2X return on their observability investment.
According to the research, respondents in Australia and New Zealand (ANZ) continue to struggle with tool sprawl. Over half (54%) were using five or more tools for observability, even though 20% said too many monitoring tools were a barrier to observing full-stack observability. This may change, as almost half (48%) planned to consolidate tools over the next year to get the most value from their observability spend. The 2023 report found:
- Observability adoption is high and increasing. About two in five (41%) in New Zealand and just over a third in Australia (35%) had achieved full-stack observability. However, just 18% said their telemetry was captured across the full tech stack, which is notably lower than the global average (24%).
- The biggest drivers for observability in ANZ are security, governance and risk (43%), multi-cloud migration (41%) and customer experience management (37%).
- Outages are expensive. 42% said critical business app outages cost their organisation AU$390,000 (US$250,000) or more per hour of downtime, which translates to a median annual outage cost of over AU$11m (US$7.37m) for Australia and AU$12.75m (US$8.5 million) for New Zealand.
- Full-stack observability improves service-level metrics—62% said their MTTR improved to some degree since adopting observability, including 26% who said it improved by 25% or more.
- 2X ROI on observability. Nearly a third (29%) of Australian C-level executives said their organisation receives a total annual value of AU$1.5M (US$1M) or more from their observability investment. Australian organisations realised a 2x return on their observability investment, while those in New Zealand broke even.
- Observability increases operational efficiency. Two out of five (42%) cited increased operational efficiency as a primary benefit, while over a third (36%) said observability improved system uptime and reliability as well as security vulnerability management (36%).
Trends driving observability
According to the report, observability remains a business imperative for forward-thinking enterprise leaders. By mid-2026, 82% or more of the global respondents expected to deploy each of the 17 different observability capabilities. Most organisations may have robust observability practices in place within three years, highlighting the industry’s growth potential.
Nearly half (49%) indicated an increased focus on security was driving need for observability, followed by the integration of business apps into workflows and the adoption of AI tech.
The security focus reflects the rise of cybersecurity threats and complex cloud-native application architectures that introduce additional risk. For OpenTelemetry, scalability (52%) and the fact that it integrates with their tool stack (46%) were driving its adoption, indicating that OpenTelemetry is a movement vendors must embrace to meet client demands.
What are New Relic’s thoughts on the survey?
“While organisations in ANZ are seeing encouraging 2x returns on their observability investment, tool consolidation remains a key priority to achieving full-stack observability and minimising the impact of outages,” said Peter Marelas, Chief Architect, APJ at New Relic.
“The Observability Forecast shows that teams with full-stack observability consistently have fewer outages while detecting and resolving issues faster than those without it. This translates to lower outage costs, a higher annual return on investment, and a positive effect on an organisation’s bottom line. The business value of observability is clear,” Marelas said.
For more information, read the full report here.
