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The observability platform market size is projected to increase by USD 1.17 billion, at a Compound Annual Growth Rate (CAGR) of 8.28% between 2023 and 2028. The growth rate of the market depends on several factors, including the growing need to improve business efficiency, the integration of artificial intelligence into observability platforms, and the growing adoption of automation in end-user industries.
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Growing need to improve business efficiency is the key factor driving market growth. Analytics with significant data leads to enhanced business productivity using predictive mechanisms and risk-averting models. It helps companies attain new growth opportunities and entirely new categories of products and services by reducing errors and failure rates. Thus, observability platforms have become a strategic priority for several industrial organizations, driving the demand among different manufacturing companies.
In addition, with growing competition, companies are focusing on more efficient supply chain operations. As stocks are the biggest asset of a business, it's becoming important to forecast and streamline the supply chain of popular products to expand sales via multiple channels. Therefore, using an observability platform, along with analytics tools, predictive analysis can be carried out to anticipate the level of demand at a given point in the future. Thus, such factors are expected to drive market growth during the forecast period.
Increasing demand for cloud-based systems is the primary trend shaping market growth. Cloud-based observability platforms eliminate the need for procurement and installation of hardware. Cloud-based systems are also capable of providing various other business benefits, such as process alignment and business consistency across an organization and access to applications by users, employees, and partners from anywhere and any place. In addition, the deployment of a platform system provides new opportunities to enterprises by leveraging technologies such as mobility, AI, and IoT.
Additionally, the adoption of cloud-based products and services is growing rapidly, owing to their cost benefits and scalability. Major players in the market, with their technological expertise, are offering different cloud-based products and services on a global network to be more productive. Therefore, the increased focus of end-users on adopting solutions is expected to propel the growth of the market trends and analysis during the forecast period.
System integration and interoperability issues is a challenge that affects market growth. System integration is required when software or infrastructure solutions are deployed on the legacy IT infrastructure of organizations. Technical issues arise during the implementation and execution phases due to differences in the software versions. Technical glitches inhibit the business continuity process of organizations, which can also lead to monetary damage. Besides, the challenges associated with system integration are further aggravated by long-term system maintenance and upgrade decisions.
Furthermore, migrating data from an on-premises (in-house data) infrastructure to the cloud (cloud-based analytics software) can create interoperability issues because of the difference in protocols used in the cloud and enterprise infrastructure. This process involves extensive application re-programming and integration, which also increases the complexity of the applications. Thus, such factors can become a major challenge, which may impede the growth of the market during the forecast period.
The market share growth by the solutions segment will be significant during the forecast period. The growth of the solutions segment is driven by the need for an observability platform to improve business efficiency, growing adoption of automation among end-users, integration of artificial intelligence into the observability platform, and product launch. With the increasing complexity of applications, the solution helps DevOps teams to evaluate their state more easily by helping facilitate the process.
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The solutions segment showed a gradual increase in the market share of USD 1.37 billion in 2018. Solutions allow enterprises to manage mission-critical data in a secure, harmonized, and compliant manner by aggravating large volumes of data from disparate sources and enabling its delivery to the platforms necessary for an organization to get the most value from the data. Market players are coming up with new product launches to meet the requirements of end-users. For instance, in November 2023, Dynatrace announced the launch of a cloud-based Enterprise Observability Platform in India. Thus, such developments are expected to drive the growth of the solution segment of the market during the forecast period.
The large enterprises segment dominated the market in 2023 in terms of market size. Large enterprises are embracing the digital transformation journey as it helps large enterprises to carry out smooth execution of the business process with cost-effectiveness. Furthermore, growing complexity due to the deployment of digital technologies such as IoT, AI, and big data makes it necessary for large enterprises to deploy observability platforms to have seamless coordination, better adaptability, and data protection along the business operation. Furthermore, features like real-time visibility and integration with big data analytics will give observability platform users of cloud-based observability platform the mobility and transparency needed to overcome adverse economic situations by inputting, storing, managing, analyzing, and mapping to a wide range of quantitative data. Thus, such factors are expected to drive the growth of the large enterprises segment in the global market during the forecast period.
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North America is estimated to contribute 55% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The US and Canada are the key revenue contributors to the market in North America. Future investments by end-users in digital transformation services in this region will be driven by their need to integrate system platforms with advanced technologies such as blockchain, AI, and Internet of Things (IoT) enabled applications and data analytics.
Moreover, market players offering in-built application programming interface services for these advanced technologies will have the opportunity to generate additional revenues through product upgrades and maintenance fees. In addition, an increase in the need for business process efficiency and transparency through digital transformation is also driving the adoption of observability platforms in the region. Hence, such factors are expected to drive market growth in this region during the forecast period.
This market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Observability Platform Market thrives amidst digital developments shaping modern-day lives, fueled by the proliferation of cloud services and hybrid cloud strategies. Amid global economic fluctuations, including recession fears and monetary policy spillovers, observability tools and platforms play a crucial role in ensuring seamless operations and user experiences. With a surge in remote-access strategies and the adoption of SASE architecture, businesses prioritize observability solutions to navigate transportation issues and shortages of components impacting Europe's infrastructure markets. As demand for infrastructure rises, particularly in the developing world, observability tools aid in managing complex cloud environments and mitigating security concerns. Small and medium-sized enterprises, grappling with budget constraints, leverage observability platforms to optimize resources and enhance network design, ultimately driving efficiency and resilience in a dynamic digital landscape.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
Observability Platform Market Scope |
|
Report Coverage |
Details |
Page number |
152 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.28% |
Market growth 2024-2028 |
USD 1.17 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.05 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 55% |
Key countries |
US, Canada, China, Japan, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Acceldata Technology Pvt Ltd., Auvik Networks Inc., Broadcom Inc., Cisco Systems Inc., Datadog Inc., Dynatrace Inc., GitLab BV, International Business Machines Corp., LogicMonitor Inc., Microsoft Corp., NamLabs Technologies Pvt Ltd., New Relic Inc., Nexthink SA, Riverbed Technology Inc., ScienceLogic Inc., ServiceNow Inc., SolarWinds Corp., Splunk Inc., StackState B.V., and Sumo Logic Inc. |
Market dynamics |
Parent market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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