Observability Market Size
| Study Period | 2019 - 2030 |
| Market Size (2025) | USD 2.75 Billion |
| Market Size (2030) | USD 4.38 Billion |
| CAGR (2025 - 2030) | 9.73% |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players*Disclaimer: Major Players sorted in no particular order |
Observability Market Analysis
The Observability Market size is estimated at USD 2.75 billion in 2025, and is expected to reach USD 4.38 billion by 2030, at a CAGR of 9.73% during the forecast period (2025-2030).
- The observability market is witnessing robust growth, fueled by the escalating intricacies of IT environments, the burgeoning adoption of cloud computing, and the imperative for real-time insights into application performance and data integrity. With organizations embracing multi-cloud strategies and hybrid infrastructures, the challenge of managing applications and data intensifies, amplifying the demand for observability solutions that offer holistic visibility across diverse systems.
- Emerging modern cloud-native observability platforms adeptly gather telemetry data—like logs and traces—and analyze this data to furnish actionable insights regarding the health of infrastructure and applications. IT and DevOps teams leverage these insights to troubleshoot issues, enhance availability, and fine-tune performance. According to DevOps.com, observability firms, encompassing security and APM entities, collectively secured nearly USD 2 billion in funding over the last two years.
- Acceldata projects that by 2026, approximately 50% of enterprises employing distributed data architectures will embrace data observability tools, a significant leap from under 20% in 2024. Furthermore, enhanced observability systems can curtail downtime-related expenses by a staggering 90%, translating to an annual savings of USD 2.5 million.
- A 2023 Middleware survey revealed that 88% of participants noted their organizations have become more receptive to full-stack observability over the past year. In response, observability vendors are now providing solutions that seamlessly integrate with security and business intelligence tools. Additionally, these tools can autonomously monitor dynamic service discovery and transient resources in cloud-native setups, ensuring consistent oversight in these fluid environments.
- Despite the advantages of observability solutions, the associated implementation and maintenance costs can deter some organizations. Moreover, challenges in integrating multiple observability tools with pre-existing systems often impede effective monitoring and analysis.
- The observability market has undergone notable transformations and expansions, particularly in response to the COVID-19 pandemic. The crisis hastened the urgency for organizations to adopt observability solutions, ensuring smooth operations amidst a shift to remote work. Presently, observability platforms are increasingly embedding AI and machine learning capabilities, refining monitoring processes, automating anomaly detection, and delivering insightful analyses on system performance.
Observability Market Trends
BFSI to Hold Significant Share
- Financial services face significant monitoring challenges due to the increased deployment of microservices. The rapid analysis of large volumes of isolated data for root cause analysis (RCA) complicates the delivery of uninterrupted customer services.
- Cloud technology has made banking services like customer onboarding, mobile payments, lending, and cash withdrawals commonplace. However, the complexity of hybrid models is evident, with over half (54%) of financial services businesses anticipating growth in this area over the next year, as reported by Dynatrace.
- Capgemini highlights a remarkable surge in cloud adoption, with 91% of banks and insurance firms now on their cloud journey, up from a mere 37% in 2020. This significant shift emphasizes the critical need to migrate core internal systems to cloud-enabled platforms, especially to fully leverage the capabilities of AI and generative AI. Thus, observability offers a comprehensive view, whether dealing with on-premises, off-premises, or multicloud solutions.
- While the BFSI sector stands to gain immensely from accelerating digital transformation, it grapples with challenges due to ever-evolving security and regulatory demands. To foster innovation without incurring risks, it's crucial to maintain complete visibility and control over technological assets. Providers like LogicMonitor leverage agentless technology to unify computing infrastructure under a centralized dashboard, ensuring comprehensive monitoring and observability.
- By offering a unified observability platform for the entire environment, providers can simplify complexities, enhance service availability, and reduce security and compliance risks. For instance, fintech company Abrigo achieved an impressive 99.99% service uptime by deploying an observability platform throughout its operations.
- Additionally, AccelData reports that junk data and pipeline downtimes can cost a single enterprise upwards of USD 14 million annually. In the U.S. alone, these losses accumulate to over USD 3 trillion each year. The rise of neobanking is further disrupting the industry, challenging established banking norms. Given these trends, a significant uptick in the adoption of observability platforms is anticipated during the forecast period.
North America to Hold Significant Share
- North America's observability market is witnessing robust growth, primarily due to the escalating intricacies of IT environments. With the adoption of hybrid and multi-cloud strategies, organizations are finding their IT infrastructures becoming increasingly complex, thereby amplifying the demand for comprehensive observability tools.
- The growing focus on Application Performance Management (APM) is driving the market's demand. The prevalent use of smartphones in the region is analyzed to enhance application usage, further fueling the demand for APM. GSMA Intelligence reports that the U.S. boasted 396 million cellular mobile connections at the dawn of 2024, equating to 116.2% of its total population. Observability tools provide a comprehensive perspective on application performance and infrastructure health, ensuring users have optimal experiences.
- Public sector entities are leveraging advanced AI, analytics, and automation to navigate the complexities of today's tech stacks. Yet, many report limited success from their initial forays into analytics and automation. Dynatrace highlights that approximately 82% of organizations have embraced AIOps to streamline their multicloud management, with an additional 12% intending to adopt it within the next year. This trend is poised to bolster the demand for observability tools.
- In the era of cloud-native adoption, Kubernetes has emerged as the preferred platform for U.S. organizations aiming to modernize applications. While Kubernetes offers notable scalability and efficiency, it simultaneously introduces added complexity. Traditional monitoring tools often lag behind Kubernetes' frequent updates, leading organizations to miss out on crucial actionable insights for decision-making and risk management. To navigate these challenges, organizations are turning to advanced observability tools, such as Middleware, which seamlessly integrate with Kubernetes, providing enhanced monitoring capabilities and real-time insights.
Observability Industry Overview
The Observability market is highly competitive and fragmented, primarily driven by the presence of major players. These key players employ strategies such as mergers, acquisitions, and product innovations to maintain a competitive edge and broaden their global footprint. Key player include Broadcom Inc., Dynatrace LLC and others.
The observability market is poised for substantial growth as organizations increasingly recognize the importance of monitoring complex IT environments in real time. With advancements in technology driving innovation in observability solutions, stakeholders must navigate challenges such as integration complexity while capitalizing on emerging opportunities within this evolving market landscape. The focus on multi-cloud adoption, AI integration, and regulatory compliance will continue to shape the future of the observability market globally.
Observability Market Leaders
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Broadcom Inc.
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Dynatrace LLC
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GitLab B.V.
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IBM Corporation
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LogicMonitor Inc.
- *Disclaimer: Major Players sorted in no particular order
Observability Market News
- June 2024: SUSE announced it has acquired StackState as part of a plan to embed observability capabilities into its Rancher platform for managing Kubernetes clusters. Announced at SUSECon event, the StackState observability platform will be embedded into the Rancher Prime version of the platform for enterprise IT teams.
- May 2024: Cisco announced a new virtual appliance for its AppDynamics On-Premises application observability offering, enabling customers to use a self-hosted observability solution built on AI-powered intelligence for anomaly detection and root cause analysis, application security, and SAP monitoring.
Observability Industry Segmentation
Observability enables teams to swiftly identify errors or deviations in data through anomaly detection, real-time monitoring and alerts. Faster troubleshooting and issue resolution helps minimize the cost and severity of downtime. The tool assists in establishing visibility for software applications and their environments.
The observability market is segmented by type (solution, services), by deployment (cloud, on-premises), by enterprises (SMEs, large enterprises), end-user verticals (IT and telecom, retail and e-commerce, manufacturing, BFSI, government and defense, other end-user verticals), geography (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Type | Solution |
| Services | |
| By Deployment | Cloud |
| On-Premises | |
| By Enterprises | SMEs |
| Large Enterprises | |
| By End-user Vertical | IT and Telecom |
| Retail and E-commerce | |
| Manufacturing | |
| BFSI | |
| Government and Defense | |
| Other End-user Verticals | |
| By Geography*** | North America |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Latin America | |
| Middle East and Africa |
Observability Market Research FAQs
How big is the Observability Market?
The Observability Market size is expected to reach USD 2.75 billion in 2025 and grow at a CAGR of 9.73% to reach USD 4.38 billion by 2030.
What is the current Observability Market size?
In 2025, the Observability Market size is expected to reach USD 2.75 billion.
Who are the key players in Observability Market?
Broadcom Inc., Dynatrace LLC, GitLab B.V., IBM Corporation and LogicMonitor Inc. are the major companies operating in the Observability Market.
Which is the fastest growing region in Observability Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2025-2030).
Which region has the biggest share in Observability Market?
In 2025, the North America accounts for the largest market share in Observability Market.
What years does this Observability Market cover, and what was the market size in 2024?
In 2024, the Observability Market size was estimated at USD 2.48 billion. The report covers the Observability Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Observability Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
Observability Industry Report
Statistics for the 2025 Observability market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Observability analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
