New Relic, the Intelligent Observability Platform, released its 2024 Observability Forecast, the industry’s most comprehensive report on the state of observability. Surveying over 1,700 technology professionals across 16 countries, the report highlights key growth areas, challenges, and external trends influencing observability investments.
The data reveals that the median outage cost for high-business-impact outages for Australia and New Zealand (ANZ) was US$2.2 million per hour, which is 16% higher than the median US$1.9 million per hour cost across all respondents. Additionally, the downtime from critical business application outages costs ANZ businesses US$500,000 or more per hour of downtime, with 79% saying it costs them US$1 million or more per hour.
The findings demonstrate a strong correlation between full-stack observability and reduced downtime, fewer interruptions, and lower annual outage costs—reinforcing the critical role observability plays in maximising operational efficiencies and business performance. With engineering teams dedicating 30% of their time to addressing outages, the report findings highlight the critical role observability plays in reducing disruptions, maximising operational efficiencies and improving the bottom line.
Outages drive considerable downtime and lost revenue
According to the research, global respondents estimated that engineering teams spend an average of 30% of their time addressing disruptions, which is equivalent to 12 hours across a 40-hour work week. The most common causes of unplanned outages over the last two years were network failure (35%), third-party or cloud provider services failure (29%), and human error (28%).
The report highlights that costly outages can impact the bottom line for ANZ companies, with high-business-impact outages occurring frequently. Over half (56%) of organisations experience them weekly or more, with 11% experiencing them at least once a day. However, observability can help mitigate these costs. 65% of respondents said their Mean Time to Resolve (MTTR) improved to some extent since adopting observability, including 29% who reported an improvement of 25% or more.
Business app integration is driving the need for observability
The biggest technology strategy or trend driving the need for observability in Australia and New Zealand (ANZ) was the integration of business apps, such as ERPs and CRMs, into workflows (31%), followed by an increased focus on security, governance, risk, and compliance (30%), adoption of open-source technologies (29%), and the development of cloud-native application architectures (28%). Nearly half (46%) of regional respondents had implemented network monitoring, followed by security monitoring (45%), infrastructure monitoring (43%), and browser monitoring (43%).
Globally, security monitoring was the most deployed capability (58%), while the AI-related capabilities deployed included AI monitoring (42%), machine learning (ML) model monitoring (29%), and AIOps (24%). An additional third is expected to deploy artificial intelligence for IT operations (AIOps) capabilities (39%), AI monitoring (36%), and machine learning (ML) model monitoring (34%) in the next year. Those deploying these capabilities estimated receiving a higher annual total value from observability and had a higher median return on investment (ROI) than average.
Observability delivers ROI for ANZ companies
Most ANZ companies said observability delivered a substantial return on investment, with 79% reporting US$5 million or more in annual value and 89% saying they received US$1 million or more in value from their investment. Australian respondents saw 3.9x ROI on their investments, while those in New Zealand saw 4x ROI.
While ANZ organisations report significant benefits thanks to observability adoption, tool fragmentation was a barrier to achieving full-stack observability. Over half (56%) of respondents in the region used five or more tools for observability, however 63% preferred a single, consolidated observability platform. Additionally, 39% said too many monitoring tools and siloed data was a primary challenge to achieving full-stack observability.
“With outages in Australian and New Zealand costing businesses up to millions of dollars per hour, it’s clear that the need for full-stack observability in the region has never been greater,” said Peter Marelas, Field Chief Technology Officer for APJ at New Relic. “The Observability Forecast has once again highlighted the tangible business benefits that observability delivers including less downtime, fewer critical outages, and high ROI, and cemented its role in helping organisations achieve their core business goals.”
Other key findings from the report include:
- Data silos are prominent: Nearly half (40%) of ANZ respondents said they had more siloed telemetry data than unified (32%). Compared to global respondents, those in ANZ were also less likely to integrate five or more types of business-related data into their telemetry data (24% compared to 35% overall), highlighting that there is limited visibility across datasets.
- Observability creates visibility: Nearly half (49%) of IT decision makers (ITDMs) in Australia and New Zealand said observability improved their life most by enabling data visualization from a single dashboard. Many also reported that observability helped achieve technical (42%) and business (38%) key performance indicators (KPIs). Practitioners’ top responses for how observability improved their lives included increased productivity (38%), reduced guesswork when managing complex and distributed tech stacks (36%), and better time prioritization (35%).
- Business observability is on the rise. Correlating business outcomes with telemetry data (business observability) was a top priority for IT professionals globally, with 40% already deploying it and 47% planning to deploy it within the next three years. Those with business observability experienced 40% less annual downtime, spent 24% less on hourly annual outage costs, and spent 25% less time addressing disruptions compared to those without.
The 2024 Observability Forecast is available today. For more information:
Research Methodology
New Relic and ETR surveyed 1,700 technology professionals in 16 countries across the Americas, Asia Pacific, and Europe. Of the respondents, 65% were practitioners (developers and engineers) and 35% were ITDMs (C-suite executives and non-executive managers). The survey was conducted in April and May 2024 by the research firm ETR. The annual Observability Forecast is the only study of its kind to make its raw survey data open and available to the public for download.
