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Observability investments expand as organizations look to scale AI use cases while mitigating risk and optimizing cost
Mustafa Eid,Dubai, UAE – Oct. 8, 2025 – Dynatrace (NYSE: DT),
the leading AI-powered observability platform, today announced the findings of an independent global survey of 842 CIOs, CTOs, and other senior technology leaders involved in IT operations and DevOps management in large organizations. The State of Observability Report 2025 from Dynatrace reveals that while AI adoption is accelerating, concerns about reliability and trust make it challenging to transition initiatives from concept to production. To address this, business leaders are prioritizing observability solutions to scale their AI projects, with more than two-thirds (70%) saying observability budgets have increased in the past year.
Key Findings from the Report
AI Adoption
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100% of business leaders surveyed are using AI as part of their operations today. Top AI use cases include data management (57%), AI governance (50%), and security operations (46%).
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AI use cases such as sustainability (27%) and logs management (29%) present opportunities for organizations to expand adoption and unlock greater efficiency and ROI.
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The two major categories where business leaders anticipate AI-powered automation delivering significant value are real-time detection and response to security risks (37%) and anomaly detection (41%).
AI Governance, Trust, and Security
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One in four business leaders believes improving AI governance and trust should be their highest priority.
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For leaders in charge of data governance, the top concerns with AI reliability relate to data quality and predictability (50%) and data privacy (45%).
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More than two-thirds (69%) of AI-powered decisions still include human-in-the-loop processes to verify accuracy.
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Nearly all (98%) business leaders reported using AI to manage security compliance in some capacity, with 69% seeing increased budgets for AI-powered threat detection in the past year and expecting further increases next year.
Importance of Observability in Driving AI Value
Alois Reitbauer, Chief Technology Strategist at Dynatrace, said:
“Enterprise IT software and applications must evolve from simply adding AI to existing systems toward building truly AI-native experiences. This shift introduces new challenges for observability, as organizations must ensure their AI-driven systems are transparent, reliable, and scalable. Observability becomes the critical foundation, providing the shared intelligence needed to navigate these challenges, make smarter decisions, and drive safe, efficient automation at scale.”
Additional Report Findings
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More than 50% of business leaders see automated real-time observability solutions enhancing customer experience within the next year.
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46% of business leaders anticipate the greatest ROI of AI-powered observability will come from optimizing AI model configurations.
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By 2030, 50% of business leaders expect to adopt AI-powered data encryption, risk assessments, and threat detection capabilities.
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70% of those surveyed said observability budgets have increased in the past year, and 75% expect budgets to increase in the next fiscal year.
Shift in the Role of Observability
Alois Reitbauer added:
“Observability is shifting from reporting telemetry about application health to informing the decisions that run the business. As more of those decisions are supported by AI, observability becomes the key to unlocking the full potential of AI-driven decision support, providing trustworthy context, guardrails, and feedback loops leaders need to act with confidence at scale.”
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