Observability Tools and Platforms Market Size
Observability Tools And Platforms Market was worth USD 2.5 billion in 2023 and is expected to grow at a CAGR of more than 10.5% from 2024 to 2032, owing to the rising need for Application Performance Management (APM) and rapid digitization. The increasing focus on APM and digital transformation activities within enterprises have accelerated the need for observability tools. Organizations look for end-to-end solutions that provide a complete view of their application performance and infrastructure.
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For example, Walmart is investing significantly in Machine Learning (ML) and Artificial Intelligence (AI) to enhance its supply chain and customer care. In 2022, the company had stated that it would leverage AI to forecast demand for products, streamline inventory, and customize recommendations for customers. Walmart is also employing ML to enhance its anti-fraud measures and capabilities.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Observability Tools and Platforms Market Size in 2023 | USD 2.5 Billion |
| Forecast Period | 2024 to 2032 |
| Forecast Period 2024 to 2032 CAGR | 10.5% |
| 2032 Value Projection | USD 6 Billion |
| Historical Data for | 2018 – 2023 |
| No. of Pages | 255 |
| Tables, Charts & Figures | 261 |
| Segments covered | Component, Deployment Model, End-User, and Region |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
Artificial Intelligence and Machine Learning technology integration will provide a positive growth scenario for the observability platforms and tools market. Observability platforms are using AI and machine learning to evaluate large sets of data, automate anomaly detection, and offer intelligent insights that improve operational efficiency. Referring to an example, Google Cloud introduced its artificial intelligence-powered observability platform, Logging Intelligence, in 2022. Logging Intelligence applies AI for automated anomaly detection in log data, which can assist engineers in resolving issues faster.
Some observability software and platforms, however, are costly, particularly for small- and medium-sized businesses with tight budgets. The expense of licensing, infrastructure, and maintenance could be a barrier for some businesses, and they might instead use less thorough monitoring solutions or delay the adoption of observability tools. In addition, observability tools usually need specialized skills to install, configure, and properly analyze data. Most organizations will lack the requisite trained staff capable of leveraging these tools, hence the slow take-up and lack of utilization of their potential.
COVID-19 Impact
COVID-19 struck the globe hard, and the observability tool world wasn't spared either. The good news is that loads of folks had to adjust to working remotely, and they depended on digital technology like never before. It made many organizations understand how significant it is to monitor their IT infrastructure, so they could ensure everything was ticking along. They put money into observability tools to ensure their online services and applications were running fabulously, despite everyone being geographically dispersed. But the thing isNot everyone was quite so fortunate. Some businesses had to cut back, and that meant they could not afford to spend as much on shiny new technology like observability. So, although the demand for these products increased in some regions, it reduced in others.
Observability Tools and Platforms Market Trends
Businesses now prioritize user experience to remain competitive. Observability tools help monitor and understand user interactions, enabling organizations to identify performance bottlenecks and optimize user experience. With the growing importance of data privacy and security, observability tools play a role in ensuring compliance with regulations and detecting security threats in real time. For instance, the Data Protection Act 2018 in the UK sets out a number of requirements for organizations, including the need to obtain consent for the processing of personal data, to keep personal data secure, and to provide individuals with access to their personal data.
Observability Tools and Platforms Market Analysis
Learn more about the key segments shaping this market
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Based on the component, the market is divided into solution and service. The solution segment is anticipated to have a CAGR of approximately 9.5% during the forecast period. The sophistication of IT environments, such as cloud-based systems, microservices, and containerization, has rendered legacy monitoring inadequate. Observability solutions provide end-to-end insights into the system, allowing for quicker issue identification and remediation.
Further, the growing influence of DevOps and agile methodology puts an importance on free flow of work among development and operation teams, necessitating continuous improvement and monitoring by the use of observability tools. Moreover, the increased need for customer satisfaction and user experience encourages companies to invest in observability for ensuring maximum application performance and a better end-user experience.
Cloud-based segment's observability tools and platforms market size stood at USD 780 million in revenue for 2022. As more and more organizations have adopted multi-cloud strategies, with the help of which organizations avail services of two or more cloud providers, there was growing demand for cloud-based observability tools that can manage and analyze varied cloud environments all at once. These tools provided businesses with an integrated view of their complete multi-cloud setup.
Cloud-based observability platforms more and more integrated Artificial Intelligence (AI) and Machine Learning (ML) features to offer smart insights and automate anomaly detection. These technologies allowed for more proactive monitoring and quicker issue detection.
Looking for region specific data?
North America observability tools and platforms market accounted for 35% of the revenue share in 2023. The region's robust and dynamic IT landscape, with a large number of businesses adopting cloud-based technologies, microservices, and containerization, necessitates advanced monitoring solutions to manage complex infrastructures. The increasing emphasis on DevOps and agile practices in North American organizations fuels the need for observability tools to enhance collaboration and accelerate software development. This apart, with the region's strong focus on user experience and customer satisfaction, observability solutions help businesses optimize application performance, ensuring a seamless and satisfactory end-user experience.
Observability Tools and Platforms Market Share
Major companies operating in the observability tools and platforms industry are
- AppDynamics (a Cisco company)
- Datadog
- Dynatrace
- Elastic (formerly ElasticSearch)
- Grafana Labs
- Graylog
- Honeycomb
- Instana
- LightStep
- Logicmonitor
- New Relic
- Sciencelogic
- SolarWinds
- Splunk
- Sumo Logic
Observability Tools and Platforms Industry News
- In January 2023, Datadog acquired LogDNA. The acquisition will allow Datadog to offer a more comprehensive observability platform that includes both log and metrics data.
- In February 2023, New Relic acquired SlashData to offer a more comprehensive observability platform that includes both APM and RUM data.
The observability tools and platforms market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments
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By Component, 2018 – 2032
- Solution
- Monitoring & alerting tools
- Distributed tracing platforms
- Log management solutions
- Application Performance Monitoring (APM)
- Others
- Service
By Deployment Model, 2018 – 2032
- On-premises
- Cloud-based
By End User, 2018 – 2032
- BFSI
- Healthcare & life sciences
- Retail & E-commerce
- Manufacturing
- Telecom & IT
- Government & public sector
- Media & entertainment
- Others
The above information is provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Asia Pacific
- China
- India
- Japan
- South Korea
- Singapore
- Australia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- GCC
- South Africa
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