Splunk report shows significant business value for observability

Source:  Splunk State of Observability 2025: The Rise of a Business Catalyst report. Observability practices that more leading organisations adopt. 

Cisco has released the Splunk State of Observability 2025: The Rise of a Business Catalyst report, marking its 5th annual analysis into the evolving landscape of observability.

This year's research highlights the critical role observability plays in delivering business value – from elevating customer experience and boosting employee productivity to guiding strategic business decisions at the highest levels. It also underscores both the opportunities and challenges of observability in the AI era, where AI is helping ITOps and engineering teams accelerate their incident response, while adding complexity as they manage new types of workloads.

The report is the largest analysis of the observability space, based on a survey of 1,855 ITOps and engineering professionals worldwide, and showcases how observability has evolved beyond an IT function to a boardroom priority. Whether analysing a revenue spike or an increase in cart abandonment rates, organisations are relying on insights from their observability practices to understand and make informed business decisions, Cisco said.

Observability powers business outcomes

As digital experiences are the main vehicle of customer engagement, leaders are turning to observability insights to make strategic decisions throughout their business, including customer experience, product roadmap forecasting and service reliability. The report found:

- Nearly three quarters (74%) of respondents report that observability positively impacts their employee productivity, and 65% say it is positively influencing revenue. In addition, 64% report their observability practice positively impacts their product roadmaps.

- The same number (74%) believe observability is important for monitoring critical business processes and 65% say it is key to understanding user journeys.

“Observability practitioners are becoming critical stakeholders to key business decisions in customer engagement strategies, product roadmaps and more,” said Patrick Lin, the SVP, GM of Observability at Splunk, a Cisco company.

“And this year’s State of Observability report findings make that clear: the full lifecycle and workflow of observability – from data collection and analysis to deriving actionable insights and implementing improvements – provides not just better context, but also support for the achievement of better results, whether in customer satisfaction, product innovation or the safeguarding of AI systems at scale.”

Organisations often measure the effectiveness of their observability practice by how well it responds to and prevents incidents. However, ITOps and engineering teams frequently struggle with too many disparate tools (59%) and a high volume of false alerts (52%).

To address these challenges, ITOps and engineering teams are embracing AI to accelerate their troubleshooting — 76% of respondents regularly use AI-powered observability in their everyday workflows. Respondents also weighed in on other current or future benefits of AI use:

- Seventy-eight percent have more time to spend on product innovation instead of app and infrastructure maintenance.

- Six in 10 predict AI will have a positive impact on troubleshooting and root cause analysis, and 58% say it will improve the detection of security vulnerabilities.

However, the report acknowledges the complexity AI introduces as practitioners spend more of their time monitoring AI workloads to ensure performance, model accuracy, and cost control. According to the report, 47% say monitoring AI workloads has made their job more challenging and 40% cite lack of expertise as a challenge to achieving AI readiness.

To help organisations in their adoption of AI, the report highlights the opportunity to upskill observability practitioners to train them in essential expertise for managing specialised AI workloads. OpenTelemetry, the Cloud Native Computing Foundation (CNCF) open-source project, has solidified its position as the industry standard for collecting traces, metrics, logs, and profiles. When an observability practice leverages OpenTelemetry, ITOps and engineering teams can collect richer data with less technical debt, thereby driving better generative AI outcomes.

In addition to access to broader tech ecosystems and stronger data ownership, OpenTelemetry provides business advantages beyond observability. Organisations adopting OpenTelemetry report significant benefits for other areas of the business:

- Seven in 10 (72%) see positive impact on revenue growth and 71% note improved operating margins and brand perception.

- “Power users” of OpenTelemetry achieve 3x greater positive impact on employee productivity, 2x improvement in customer experience, and stronger resilience – 47% never panic during customer incidents, compared to 32% of non-users.

Nearly six in 10 (57%) frequent OpenTelemetry users also use observability-as-code, a DevOps approach that treats observability configurations like code to drive better standardisation and scalability. In contrast, only 10% of OpenTelemetry laggards use observability-as-code.

In the analysis, the Splunk report singled out “observability leaders” as organisations that achieved better business outcomes relative to their peers. These leaders are more likely to adopt forward-leaning practices and resources, such as OpenTelemetry and code profiling, and foster greater collaboration with observability and security teams. 

The leaders consistently demonstrate:

- Significant improvement in revenue, employee productivity, and product roadmaps, with leaders generating an annual 125% return on investment (ROI) from their observability practices (53% higher than non-leaders). The report defines ROI through reduced downtime, reduced employee turnover, improved customer experience, faster mean time to detect/respond (MTTD/MTTR) and more. 

- Accelerated root cause analysis through the use of code profiling (78% of leaders). Code profiling is a practice that enables teams to identify the problematic source code directly instead of only which service is affected.

- Stronger collaboration across observability and security teams, with 59% sharing and reusing data more effectively, and 44% strongly agreeing their ITOps, engineering and security teams troubleshoot and solve issues together.

In the Asia Pacific region (APAC), observability and AI are redefining how organisations innovate, respond, and compete. Observability and AI are:

- A business multiplier: 65% of organisations across APAC say their observability practice positively impacts revenue, while 64% see improvement in product roadmaps. 

- A foundation for resilience: Nearly two-thirds (64%) of organisations that align observability and security teams report fewer customer-impacting incidents and improved data quality. 

- An engine for innovation: AI-enabled observability is helping teams shift focus to drive faster decision-making and proactive operations; 78% of teams said AI allows them to focus more on innovation than maintenance.

Country-wise:

- Singapore leads in speed and AI adoption, with 64% of organisations ranking incident troubleshooting speed as their top ROI driver, and 85% already embedding AI in daily workflows. These are among the highest rates globally. 

- Australia and India are unlocking innovation gains: 87% of Australian and 82% of Indian organisations say AI enables them to spend more time on innovation than maintenance, helping teams deliver better business outcomes. 

- Japan and New Zealand highlight the next frontier: more than half of teams cite skills shortages as barriers to fully realising the value of AI and observability, signalling where future investment in talent will be critical to sustaining growth and ROI.

“For a modern business, built on digital experiences, observability is not just about error resolution; it is a foundational discipline required for making business-shaping decisions at speed and scale,” said Shannon Kalvar, Research Director at IDC.  

Explore

Read the 2025 Splunk State of Observability report at https://www.splunk.com/en_us/campaigns/state-of-observability.html

*The global survey was conducted from February through March 2025 and surveyed 1,855 ITOps and engineering professionals from practitioners to VP-level executives (including developers, site reliability engineers (SREs), systems engineers, infrastructure operations professionals, CTOs, and CIOs). The survey respondents were drawn from nine countries: Australia, France, Germany, India, Japan, New Zealand, Singapore, the UK, and the US. Respondents also represented 16 industries: business services, construction and engineering, consumer packaged goods, education, financial services, government (federal/national, state, and local), healthcare, life sciences, manufacturing, technology, media, oil/gas, retail/wholesale, telecom, transportation/logistics, and utilities.