Enterprise observability practices: Opportunities, challenges, and the growing role of AIOps

Observability is now firmly established in organizations with 78% of enterprises and large midmarket companies having an observability practice in place, according to recent research by Enterprise Strategy Group (ESG). The research findings, described in Distributed Cloud Series — Observability and Demystifying AIOps, gauge the state of observability in the enterprise.

The good news is that organizations are realizing many of the benefits of observability today, and there are opportunities to optimize and expand these practices. ESG reveals organizational challenges and the decisions and tradeoffs facing IT and DevOps teams as they look to reduce downtime, increase operational security, and improve digital experiences.

At Cisco, we view observability as a journey, and focus on helping customers achieve insights across their entire application estate. “Full-stack” observability is comprehensive monitoring, tracking, and analysis of applications, their dependencies, and related infrastructure across all layers and components to gain real-time insights into behaviors, performance, and risks.

To help organizations deliver exceptional digital experiences, this type of observability strives to aggregate and correlate data from across operational domains — including applications, networking, multicloud infrastructure, cloud services, security, end users, the business, and more.

The findings from ESG showcase the benefits, challenges, and opportunities to mature and evolve observability practices — let’s dig into some of the highlights.

Widespread adoption and opportunity for maturity

In the shift from application monitoring towards observability, nearly half of survey respondents indicate that they use observability capabilities to accelerate fault isolation, root cause analysis, and resolution of issues across their application and infrastructure environments. By gaining real-time insights across their technology stack, they can ensure service-level agreements (SLAs) and performance commitments are met.

Teams also use insights from their observability practice to automate operations and improve their security posture by better detecting and prioritizing vulnerabilities based on impact. As an organization’s observability practice matures, they address additional use cases around optimizing costs, ensuring they meet compliance requirements, and monitoring digital experiences for users.

These use cases align with the outcomes delivered by Cisco Full-Stack Observability. It provides real-time visibility, insights, and recommended actions — all enriched with business context — to enable cross-domain operations teams to prioritize and resolve issues quickly and ultimately deliver exceptional digital experiences to all users.

Clear value in reducing downtime

Nobody likes downtime, but it’s extra painful when it impacts revenue. Of those surveyed, 92% derive at least some revenue from applications built in house. For many, these homegrown applications account for a significant portion of their digital revenue, making downtime especially costly. There is also the growing dilemma of “invisible downtime” — a gap between application performance indicators and the actual digital experience of end users. It’s a modern dichotomy that Cisco Full-Stack Observability addresses by delivering true end-to-end visibility.

In addition to the value of getting downtime under control, observability solutions also help organizations improve cybersecurity visibility. In fact, according to ESG, security detection and response capabilities are reported as the topmost impactful benefits. As a result, organizations who felt more at risk due to insufficient cybersecurity visibility decreased from 62% to 53% between 2022 and 2023.

Securing the application environment

When it comes to acting on security issues, context is king. Correlating business context along with other insights in an observability practice enables organizations to prioritize and make better decisions. Without the right context, many organizations report that it’s difficult to correlate data from multiple sources within a workable timeframe and prioritize alerts according to true severity.

With Cisco Secure Application, which is powered by Cisco Full-Stack Observability, not only can you highlight security issues and gain real-time remediation guidance, but you can also prioritize those issues with a business risk score that identifies which business transactions pose the greatest risk and should be addressed first.

The ESG findings also show that observability brings security teams into tighter alignment with IT and software developers. This is because observability solutions make more data and insights available to more teams and enable IT operations to better serve the business.

With observability practices, teams have moved from a reactive operational mode to innovating for the future. For example, after deploying Cisco Full-Stack Observability solutions, Alice McElroy, Director of Operational Excellence at Royal Caribbean, explained, “Our culture has changed. We went from being a reactive type of organization to a proactive, preventive organization.”

ESG survey participants also reported faster time-to-problem-resolution through their observability practices. This frees up time for more impactful work, which results in increased innovation and accelerated digital transformation initiatives.

Making observability practices more efficient

While there are so many benefits to be gained through observability practices (we just scratched the surface here), it’s not without some challenges. As practices mature, some organizations still struggle with too many monitoring tools. According to the ESG research, 72% of organizations agree that the number of tools they use adds complexity.

While many have planned additional investments, it’s a challenge to ensure teams are getting the most from current and future expenditures. Scalability and reliability are often core deployment roadblocks, while related concerns include tool cost and the speed at which those costs are growing.

This is reflective of a preference for an end-to-end approach to observability that consolidates tools and provides cross-silo integration and automation. Cisco Full-Stack Observability minimizes tool sprawl by bringing together data and insights across all domains, data types, and systems.

AIOps has significant untapped potential

AIOps adoption has progressed rapidly, and organizations participating in the ESG survey confirm it allows them to scale observability operations and free up resources. However, others believe they lack the in-house expertise to effectively deploy AIOps. Additionally, more than a third (36%) of those who have implemented AIOps report operational difficulties that prevent them from fully realizing the benefits of automation.

This is an area where Cisco recently announced new innovation. The Cisco AIOps application for Cisco Observability Platform allows IT operations to automate processes and keep teams productive and responsive. Cisco AIOps unifies data from infrastructure, applications, and end user monitoring tools, simplifies real-time business health monitoring, and significantly reduces noise from events and alerts. There are huge potential benefits to capture.

How does your organization compare?

Check out ESG’s research by downloading the Observability and Demystifying AIOps ebook. Regardless of where you are in your observability journey, Cisco can help you grow and mature your practice for maximum impact.


Meg Diaz

Vice President

Strategy, Incubations and Applications