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ROI of Open-Source and Commercial Observability Tools

Log file analysis, a once-preferred approach for troubleshooting production issues, has significantly changed in recent years. The advent of traces, Metrics, and AI-powered problem analysis has revolutionized the field, replacing manual approaches. This shift is crucial to understand, as it underscores the importance of Mean Time to Resolve in our current landscape.


As critical decision-makers and technical professionals in observability and troubleshooting, your expertise is instrumental in navigating the observability landscape. It's worth noting that open-source solutions offer a significantly more cost-effective option than their commercial counterparts.


About our ROI comparison


In our example, we've used Ponemon's study, which states that one minute of downtime costs USD 9000. We assumed ten applications would be onboarded to APM products and maintained for over five years. According to a study conducted by Dynatrace MTTR (Mean Time to Resolve), the mean time to resolve is reduced by 90% once Dynatrace is integrated. 



What is the 5-year TCO of open-source observability solutions?


For open-source APM tools, higher integration and maintenance efforts are often overlooked. It's correct that some metrics are collected out of the box, but organizations must modify their application code to make open-source APM useful. This comes with a significant effort, including implementation, testing, and deployment on production. In addition, metrics must be visualized on Dashboards, which requires development and maintenance effort. 


We used the following

  • 50 days/app integration effort

  • Five days/app annual maintenance effort


The ROI after five years for open-source APM solutions is -10%.


What is the 5-year TCO of commercial observability solutions?


The integration and maintenance effort for commercial observability tools is much lower because they come with a higher level of automation support. Usually, no code adjustment is required during the integration, and automatic updates are supported.


We used the following in our calculation 

  • Annual subscription of 110K USD.

  • Five days/app initial integration effort.

  • 1.5 day/app annual maintenance efforts from year two onwards.


The ROI after five years for commercial APM solutions is 77%.


Takeaway


Comparing open-source and commercial APM / Observability platforms requires a holistic feature evaluation and business case calculation. Technical capabilities are crucial, but in many APM projects, conclusions are reached by comparing the software license costs and neglecting integration and maintenance efforts. Commercial APM/Observability solutions often break even during the first year and outperform open-source APM products several times.


Do you need assistance in your Observability project? Just reach out, we are happy to help and make your project a success.


Keep up the great work! Happy Performance Engineering!



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