The News: Cisco introduces a new virtual appliance for its AppDynamics On-Premises observability platform, incorporating artificial intelligence (AI)-driven intelligence for anomaly detection, root cause analysis, application security, and SAP monitoring. The company also launches AppDynamics Flex, offering customers the choice between self-hosted and SaaS observability solutions. To read more, visit the original press release here.
Cisco Unveils New AI-Powered Observability Solutions for AppDynamics
Analyst Take: There is a noticeable shift toward cloud-based solutions in the ever-changing field of application observability. The advantages of agility, scalability, and cost-effectiveness that these solutions offer are what are driving this shift. Nevertheless, even with this change, there is still a substantial need for self-hosted observability solutions. This is especially true for organizations that have strong data residency requirements or operate in heavily regulated industries. Cisco’s integration of AI-powered enhancements into its AppDynamics On-Premises platform effectively meets the growing demand and caters to the varied requirements of the market.
The announcement from Cisco may influence the market dynamics related to application observability. Cisco enhances its position as a provider of observability solutions by offering a virtual appliance that includes advanced AI features for anomaly detection, root cause investigation, and application security. This move highlights the significance of flexibility and options for customers in overseeing their monitoring infrastructure.
Developers and IT operations teams are being given more responsibility to guarantee the performance, security, and resilience of complex application environments due to changing business concerns. Conventional methods of observability frequently fail to adequately handle these complex difficulties, resulting in inefficiencies and operational bottlenecks. Cisco’s AI-driven advancements could provide developers with skills to identify and resolve performance irregularities, boost application security, and improve SAP environments. Developers may optimize troubleshooting processes and proactively resolve possible issues that may affect business operations by utilizing intelligent automation and real-time data.
In fact, approximately 75% of respondents in our recent observability research study indicated using 6 to 15 observability tools to gather organizational data. Complexity of applications and heterogeneity of environments (mix of on-premises and cloud) necessitate a diverse set of tools to monitor various aspects of the application and infrastructure.
The introduction of Cisco’s AppDynamics Flex licensing model provides another option for developers and their approach to observability solutions. This licensing strategy allows organizations to switch between self-hosted and SaaS products, in line with their changing needs and objectives for digital transformation. Developers may have increased flexibility and agility to adjust their observability architecture in order to meet evolving workload requirements and compliance constraints. Cisco aims to enable developers to future-proof their monitoring strategies and drive innovation confidently by offering the flexibility to switch between deployment types without sacrificing functionality or performance.
Looking Ahead
As organizations increasingly adopt cloud-native architectures and embrace digital transformation initiatives, the field of application observability is set to undergo additional evolution. Due to the increasing complexity of modern application environments and the rising need for immediate insights, the market is projected to experience a sustained migration toward cloud-based observability solutions. Nevertheless, despite this current trend, there will continue to be a need for self-hosted observability solutions, especially among big organizations that have strict regulatory requirements or operate in industries where the residency and sovereignty of data are of utmost importance.
Our research shows, in 2023, 41% of organizations invested between $50,000 to $500,000, while 32% allocated budgets ranging from $500,000 to $1 million for full stack observability solutions. However, in 2024, around 30% of organizations are projected to allocate budgets ranging from $1 million to $5 million, a notable increase compared to 16% in 2023. This trend indicates a growing expenditure on observability solutions in response to the significance of automation and digital transformation initiatives.
Cisco’s announcement of AI-powered advancements for AppDynamics On-Premises and the introduction of AppDynamics Flex licensing demonstrates a deliberate reaction to the current market conditions. Cisco provides observability solutions that address the needs of organizations using both cloud-based and self-hosted deployment models. These solutions aim to help organizations effectively monitor their applications, even in complex environments. This adaptability not only caters to the varied requirements of customers but also establishes a path toward facilitating future expansion and development.
Moving forward, we may anticipate a greater focus on hybrid observability strategies, wherein organizations utilize a blend of self-hosted and cloud-based solutions to enhance performance, security, and compliance. Future innovation and customer flexibility depend on vendors who are proactive in identifying and responding to market changes, as Cisco has demonstrated with AppDynamics Flex. Developers and IT teams may enjoy advantages in terms of increased options and flexibility when choosing observability solutions that match their specific needs. This will allow them to proactively address changing business concerns and enhance innovation with improved effectiveness.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other Insights from The Futurum Group:
Cisco Q2 2024: Security, Collaboration, and Observability Shine
Market Insight Report: Navigating Innovation in AI, Application Development, and Observability
Observability Analyst Insights on New Global Study
Author Information
At The Futurum Group, Paul Nashawaty, Practice Leader and Lead Principal Analyst, specializes in application modernization across build, release and operations. With a wealth of expertise in digital transformation initiatives spanning front-end and back-end systems, he also possesses comprehensive knowledge of the underlying infrastructure ecosystem crucial for supporting modernization endeavors. With over 25 years of experience, Paul has a proven track record in implementing effective go-to-market strategies, including the identification of new market channels, the growth and cultivation of partner ecosystems, and the successful execution of strategic plans resulting in positive business outcomes for his clients.
Bringing more than a decade of varying experience crossing multiple sectors such as legal, financial, and tech, Sam Holschuh is an accomplished professional that excels in ensuring success across various industries. Currently, Sam serves as an Industry Analyst at The Futurum Group, where collaborates closely with practice leads in the areas of application modernization, DevOps, storage, and infrastructure. With a keen eye for research, Sam produces valuable insights and custom content to support strategic initiatives and enhance market understanding.
Rooted in the fields of tech, law, finance operations and marketing, Sam provides a unique viewpoint to her position, fostering innovation and delivering impactful solutions within the industry.
Sam holds a Bachelor of Science degree in Management Information Systems and Business Analytics from Colorado State University and is passionate about leveraging her diverse skill set to drive growth and empower clients to succeed in today's rapidly evolving landscape.
