New Relic Report Shows IT and Telecommunications Industries are Embracing Observability to Capitalize on AI and Cloud

New Relic published its State of Observability for IT and Telecommunications report, which offers insights and analysis on the adoption and business value of observability for the IT and telecommunications (telco) industry. The report is based on insights from 423 technology professionals and was developed in association with the 2023 Observability Forecast. It reveals organizations are facing costly outages and adopting observability to improve cross-team collaboration and strategic decision making.

The report highlights the importance of implementing full-stack observability, with the top trends driving adoption being the development of cloud-native application architectures (48%), adoption of AI technologies (43%), migration to a multi-cloud environment (40%), and an increased focus on customer experience management (39%). The report findings also show that IT and telco organizations understand the business value of observability, with 55% of respondents noting that observability improves collaboration and decision making.

“The IT and telco industries are going through mammoth change. Those with legacy infrastructure must modernize and implement rapid digital transformation initiatives to keep pace with their digital-native counterparts,” said New Relic Chief Design and Strategy Officer Peter Pezaris. “There is a customer expectation that the benefits of new technologies like 6G, edge computing, and AI are made available to them, all while current service levels are maintained or exceeded. In such a high stakes environment, full-stack observability is crucial, and IT and telco providers should leverage it to capitalize on these advancements.”

Observability and AI create industry leading advantages

Close to half (43%) of IT and telco organizations said AI technologies were driving observability adoption. When organizations integrate observability with AI, they position themselves at the forefront of technological innovation by addressing the challenge of sprawling data sets and improving operational efficiency. Observability is crucial to the success of AI, as it helps teams to understand their telemetry data, how to improve MTTR, and enables developers to easily apply fixes to code-level errors in their integrated development environment (IDE). It increases automation for rapid alerts, while improving incident detection and resolution.

Tool consolidation is key to reducing outages

The report uncovered that IT and telco organizations have higher outage frequencies compared to other industries, with 37% experiencing outages at least once a week compared to the industry average of 32%. This adds up to a median annual outage cost of $12.71 million, which emphasizes the critical need for improved monitoring and rapid issue-resolution capabilities.

IT and telco organizations were more likely than average to use multiple monitoring tools, with more than two-thirds (69%) using four or more tools for observability compared to 63% overall. This indicates that engineering teams are spending significant time and money tool-hopping to better understand the different aspects of their business and to resolve the issues that lead to costly outages and poor customer experiences.

Additionally, there was a prevailing preference among respondents for a single, consolidated platform (56%), with just over two-fifths (41%) saying that their organization was likely to consolidate tools in the next year to maximize their observability spend.

Security and DCX are essential components to success

System security is crucial in all industries, but especially to IT and telco organizations that operate critical infrastructure. Most respondents (96%) plan to use security monitoring by mid-2026, demonstrating that system security maintenance is a primary focus.

Additionally, digital customer experience (DCX) continues to be a paramount consideration as organizations face unprecedented opportunities to engage with customers in new ways. IT and telco providers can use digital experience monitoring (DEM) to capitalize on these opportunities by tracking and optimizing performance and reliability to deliver improved experiences through real user monitoring (RUM). Nearly half (45%) of IT/telco respondents expected to deploy synthetic monitoring in the next one to three years, 36% expected to deploy mobile monitoring, and 23% expected to deploy browser monitoring.

“My teams aren’t disconnected or buried in the complexity of our services, alerts, logs, or data. Our integration platform gives one clear view, so issues can be identified and fixed before it impacts our customers. That’s what truly matters,” said Skyscanner Principal Software Engineer Daniel Gomez Blanco.

For more information, view the State of Observability for IT and Telco report.