Enterprises realise 2X ROI on observability

New Relic, has published the 2023 Observability Forecast report, which examines the evolution of observability, and its impact on the lives of technical professionals and businesses’ bottom lines. The report reveals observability’s adoption is on the rise and full-stack observability leads to better service-level metrics, such as fewer, shorter outages and lower outage costs. Respondents receive a median $2 return per $1 of investment in observability, with 41% receiving more than $1 million total annual value. 

The third annual study is once again the largest, most comprehensive of its kind, and the only study to open-source its raw data. This year’s report surveyed 1,700 technology 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. 

According to the research, organizations are using fewer observability tools than in 2022 and are beginning to adopt single, consolidated observability platforms. While monitoring is still fragmented and most organizations do not yet monitor their full technology stacks, more observability capabilities were  deployed year-over-year, and 58% more organizations have achieved full-stack observability. 

Findings from the 2023 Observability Forecast include:

Downtime costs $500K+ per hour: 32% of respondents said critical business app outages cost more than $500K per hour of downtime. Respondents report a median annual outage cost of $7.75 million, those with full-stack observability experience a median outage cost 59% lower than those without full-stack observability. 

Full-stack observability is on the rise: 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.

Tool consolidation is preferred: 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. 

“High-business-impact outages are incredibly expensive for today’s organizations,” said Peter Pezaris, Chief Strategy and Design Officer 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. This translates to lower outage costs, a higher annual return on investment, and a positive effect on an organization’s bottom line. The business value of observability is clear.”

Observability Improves Service-Level Metrics

One of the report’s key takeaways is that organizations that achieve full-stack observability improve service-level metrics — particularly mean time to resolution (MTTR) and mean time to detection (MTTD) — and get the most out of their investments. Respondents with full-stack observability were more likely to experience the fastest MTTR and MTTD (less than 30 minutes), as well as seeing the most improvement for both metrics year-over-year. 

The research shows that investing in observability pays off.  For example, respondents who said their organization has more than five observability capabilities currently deployed were 40% more likely to detect high-business-impact outages in 30 minutes or less, compared to those with one to four deployed. As critical business application outages grow ever more expensive — 61% said downtime costs at least $100,000 per hour — the impact on service-level metrics translates to significant savings. Organizations with full-stack observability had median outage costs of $6.17 million per year compared to $9.83 million per year for those without full-stack observability — a cost savings of $3.66 million per year.

Respondents recognize the hard financial stakes attached to observability. Asked to name the most significant business outcome if an organization did not have an observability solution, they pointed to the concrete impacts of higher operation costs and revenue loss from downtime. 

Benefits of Observability 

According to the Observability Forecast, practitioners and IT decision-makers are seeing clear but different benefits as a result of their current observability solution. The report reveals that observability: 

Increases productivity and release velocity: Almost half (46%) of practitioners said it increases their productivity so they can find and resolve issues faster.

Makes the job easier: About a third (35%) of IT decision-makers said it helps them achieve technical key performance indicators (KPIs) and/or business KPIs (31%).

Ensures peak demand performance: 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. 

Trends Driving Observability

Observability remains a business imperative for forward-thinking enterprise leaders. By mid-2026, 82% or more of respondents expected to deploy each of the 17 different observability capabilities. Most organizations 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 the need for observability, followed by the integration of business apps into workflows and the adoption of AI technologies. 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 existing tool stack (46%) were driving its adoption, indicating that OpenTelemetry is a movement vendors must embrace to meet customer demands.