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The cloud is an ever-growing technology domain that provides numerous advantages over traditional server-based systems and computing capabilities. The shift toward cloud-based architectures has been attractive for many organizations due to its various benefits, such as increased flexibility, efficiency and performance, and the possibility for innovation and new capabilities. 

However, despite the cloud’s potential to enhance the resiliency of businesses in a hybrid work environment, most companies still have a significant gap in their cloud infrastructure regarding observability. Observing and monitoring the performance of cloud-based systems is vital for any cloud-computing implementation that utilizes open-source platforms such as AWS, Microsoft Azure or Google Cloud Platform. 

This is particularly important in cloud-native environments, where using cloud-native technologies is essential to taking full advantage of the benefits of the cloud.

The observability advantage

Over the past decade, there has been a solid push to increase agility in enterprise IT to support the digitization of business processes and services. This trend has led to various technological innovations, such as infrastructure virtualization and containerization. However, traditional IT monitoring tools need to be equipped to handle the complexity and vast amount of telemetry data that come with deploying new containerized microservices. 


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These trends are a part of the cloud-native movement, in which observability is considered the “new monitoring” solution for effectively managing and monitoring the performance of cloud-based systems and services.

Migrating applications to the cloud can offer many benefits, including increased agility and reduced costs, but this process can often be challenging for organizations. In fact, a survey by ESG found that 51% of businesses cited understanding app dependencies as their top challenge regarding cloud migration. Additionally, the increasing complexity and unpredictability of hybrid IT environments can make it challenging to ensure a successful migration to the cloud. 

Therefore, it is essential for IT teams to maintain observability and control when monitoring performance and to ensure a consistent user experience in the cloud, both during the migration process and afterward. This is especially important in today’s hybrid work environment, where cloud-based technologies are becoming increasingly prevalent. 

Cloud observability allows organizations to track, measure, and optimize the performance of their applications before, during and after the migration to the cloud. Without this capability, the process of moving to the cloud can become more complex and costly, potentially leading to negative impacts on the end-user experience and increasing cybersecurity risks.

“The cloud is a major tool used in digital transformation, and cloud observability enables IT organizations to monitor and understand their applications and systems in the cloud and use collected information to optimize performance and troubleshoot any issues that might occur,” John Engates, field CTO at Cloudflare, told VentureBeat. 

Engates explained that modern observability platforms can process high volumes of data points per second without any reduction in performance, making them well-suited for modern, distributed multicloud environments.

“Cloud observability platforms also help organizations comply with emerging regulatory and industry requirements related to data management. They are specifically designed to handle the large amounts of data generated in cloud environments and can easily scale to fit the needs of organizations of any size,” he said. 

In addition, cloud observability platforms often offer greater flexibility in terms of collaboration and integration. Collaboration features allow distributed teams to work together across time and space. At the same time, integration capabilities enable these platforms to seamlessly interoperate with other systems, such as communication and collaboration platforms and incident management tools, to provide more comprehensive management of the cloud environment. This empowers businesses to tackle several architectural challenges by identifying hidden risks and constraints that could result in performance issues, unexpected delays and unplanned costs.

Better observability for cost optimization

While cloud technologies have seen rapid adoption, many hidden costs and unexpected expenses can still surprise organizations, making cloud initiatives more costly than initially anticipated. Research from Flexera shows that organizations often need help tracking and controlling cloud costs, with an estimated 30% of cloud spend being wasted. To address this cost issue, organizations are now focusing on observability solutions that can help identify the root causes of increased cloud costs. 

Inculcating cloud-native observability tools within legacy cloud architectures can provide valuable insights into an organization’s most expensive types of cloud data and help it identify opportunities for cost savings. It helps organizations identify and decommission idle resources, resulting in significant cost savings. By examining data on cloud traffic, the most expensive types of data, and pricing tiers, businesses can improve their planning and strategically place data and applications to achieve greater efficiency.

Image Source: Flexera.

Abhay Salpekar, VP of cloud and platform engineering at Anomali, said that using cloud observability platforms can reduce costs compared to traditional monitoring solutions such as application performance management (APM), as the cloud platforms retain the most relevant metrics, traces and logs.

“Traditional monitoring checks systems’ health from the outside, by periodic polling into system components and collecting health stats. In contrast, observability is about emitting systems’ vital health stats in the form of metrics, logs and traces in complex dynamic distributed systems that can be used in close to real time,” he said. 

“Using observability for data-pipeline management improves an organization’s ability to fully understand the health of the data in their ecosystem and helps eliminate data-pipeline downtimes.”

In addition to real-time monitoring and identification of idle resources, cloud observability can also provide insights into the root causes of cost increases. Businesses can identify patterns and trends that may be driving costs up by analyzing resource usage and performance over time. This feature helps organizations make informed decisions about optimizing their cloud infrastructure.

Salpekar said cloud observability helps cloudops and site reliability engineers (SREs) identify issues, triage them and then assess root causes to resolve them. 

“It exposes all the interrelated elements and microservices within a cloud workflow and helps assess how those microservices communicate with one another. Implemented well, cloud observability platforms help remediate issues faster, resulting in higher availability of services,” Salpekar said. 

The essence of cloud observability in 2023

As data becomes more central to the operations of businesses in all industries, the need for effective tools to manage and optimize data-driven processes will only continue to grow. Due to this, data-driven companies will also increasingly rely on cloud observability to optimize their operations and make informed decisions. Here are a few reasons why cloud observability will be critical for these organizations in 2023 and beyond:

  • Enables real-time monitoring and alerting: In a data-driven company, real-time insights are crucial for making informed decisions and responding to changing business needs. Cloud observability provides real-time monitoring and alerting, allowing organizations to stay on top of their cloud infrastructure and respond to any issues or potential problems as they arise.
  • Helps optimize resource usage: Data-driven companies often rely on a mix of on-demand and reserved resources in their cloud infrastructure. Cloud observability can help optimize resource usage by providing insights into resource utilization and identifying instances of over-provisioning or under-utilization. This can result in significant cost savings and help organizations run their cloud infrastructure more efficiently.
  • Supports data privacy and security: In 2023 and beyond, as governments pass increasingly stringent laws on privacy and fines against rule breakers get steeper, data privacy and security will be more critical than ever. Cloud observability can help data-driven companies ensure that their cloud infrastructure is secure and compliant by providing real-time monitoring and alerting for potential security breaches and other threats.
  • Facilitates better decision-making: Cloud observability can help data-driven companies make more informed decisions about their infrastructure and operations by providing real-time insights into cloud-based systems’ performance and resource usage. This can improve efficiency, cost savings and overall outcomes.

Talking about the current adoption of cloud observability platforms, Poojan Kumar, CEO and founder of Clumio, told VentureBeat that data-driven organizations would be leaning in on cloud observability tools in 2023 for continuous monitoring and security of their data. 

“A data protection-based observability toolchain is becoming essential for the real-time security and privacy of data against breaches, ransomware and cyberattacks,” said Kumar. “Cloud observability can be used to power real-time security for vast data estates. When it comes to governance and use, observability tools can provide audit trails of access and permissions, and visibility into costs associated with storage, protection and downstream usage of the data. For companies looking to rein in their data, cloud observability is non-negotiable.” 

Current challenges and key considerations for observability 

Engates said one of the significant challenges of implementing cloud observability within cloud architectures is the general need for more skills and expertise. 

“Organizations may struggle to find staff with the necessary specialized knowledge and experience to successfully deploy and operate a modern observability platform,” he said. “Another challenge is the cloud environments’ complexity, which can make integration with various components and systems difficult. This requires a deep understanding of how these systems interact and function, which may be beyond the capabilities of observability teams and may require help from the individuals who are more focused on building applications.” 

Engates said that cost is always a consideration when implementing new technologies, and organizations must weigh the cost of implementing a cloud observability strategy against the potential cost of not having one in place.

“As a CTO, it is important to consider the business needs that a cloud observability solution is intended to address. This may include performance monitoring, troubleshooting, cost optimization, security or compliance. Once the specific needs have been identified, the CTO should evaluate vendors based on their ability to meet those needs, as well as technical fit, cost, ease of implementation and use, skills required and vendor track record,” he explained. 

Likewise, Salpekar told VentureBeat that every data-driven organization needs a cloud-native observability solution to help manage their increasingly complex and dynamic applications and technology stacks. 

“This decision isn’t easy, of course, and technologists need a purpose-built observability solution that observes distributed and cloud-native apps. Technologists should choose a cloud-native observability solution that enables them to monitor the health of key business transactions distributed across their technology landscape,” said Salpekar.” An effective observability solution should combine 360-degree visibility with sophisticated AIops capabilities, leveraging the power of AI and business intelligence to prioritize actions in a cloud-native environment.”

What to expect from cloud observability in 2023

Engates said that in 2023, cloud services will begin to take on the compliance burden for IT teams, automatically determining where data can be legally stored and processed. He predicts that this might happen as a response to the rollout of new privacy regulations by governments worldwide, which require companies to understand and comply with a patchwork of regulations as they operate globally.

“Cloud providers will ideally begin to include built-in compliance features to help companies meet these requirements,” he said. “The burden of compliance should largely be handled by the cloud services and tools being used, rather than requiring developers to have extensive knowledge of data storage and processing laws.” 

Ultimately, he said, “Networking services should route traffic efficiently and securely while complying with data sovereignty laws, storage services should comply with data residency regulations, and processing should adhere to data localization standards. Cloud observability tools will assist organizations in keeping track of data management and compliance, whether managed in-house or automatically by the cloud provider.”

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