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Observability has moved beyond monitoring servers and troubleshooting outages. The Splunk State of Observability 2025 report, released by Cisco, shows that it is now directly influencing revenue decisions, AI readiness, customer experience, and even boardroom conversations.
Based on insights from 1,855 ITOps and engineering professionals across the globe, the report highlights a shift — observability is no longer a support function but a business catalyst.
74% of respondents say observability boosts employee productivity
65% credit it for revenue growth
64% say it shapes product roadmaps
Companies are now using observability to understand customer journeys, reduce cart abandonments, prioritise product features, and make faster decisions. It’s also informing leadership discussions around service reliability and business risk.
Patrick Lin, SVP and GM of Observability at Splunk, explains: “Observability practitioners are becoming critical stakeholders to key business decisions in customer engagement strategies, product roadmaps and more.”
According to the Splunk report, 76% of organisations are using AI-powered observability tools to automate incident response and root cause analysis. This shift is freeing up time for innovation — 78% of respondents say AI gives them more bandwidth for product development instead of maintenance tasks.
However, there is a flip side:
47% report that monitoring AI workloads has made their jobs more challenging
40% say lack of AI expertise is slowing adoption
Teams now need to monitor model drift, accuracy, performance, and cost — which traditional observability tools weren’t designed for.
The Splunk report spotlights OpenTelemetry as a major enabler of scalable observability practices. Organisations that frequently use OpenTelemetry report:
72% positive revenue growth impact
71% improved operating margins and brand perception
3x higher productivity gains among “power users”
These teams are also adopting ` and code profiling — treating telemetry configurations just like software to improve reliability and standardisation.
What Sets 'Observability Leaders' Apart?
The report categorises “observability leaders” — companies that generate higher returns from their observability investments. These organisations report a 125% annual ROI, driven by reduced downtime, faster troubleshooting, and stronger customer experience.
What they do differently:
| Practice | Impact |
|---|---|
| Code profiling | 78% improve root cause analysis speed |
| Security-ITOps collaboration | 59% share and reuse observability data |
| AI-driven automation | Faster MTTD and MTTR, less firefighting |
| OpenTelemetry adoption | Richer data, lower technical debt |
Why This Matters for CIOs and CTOs
For tech and business leaders, the Splunk report positions observability as:
A revenue protection system
A foundation for AI resilience and governance
A decision-making layer for customer experience and product strategy
As Shannon Kalvar, Research Director at IDC, puts it: “Observability is not just about error resolution; it is a foundational discipline required for making business-shaping decisions at speed and scale.”
The Splunk State of Observability 2025 report makes one thing clear — observability is evolving into a core business function. As organisations deploy more AI, expand digital services, and compete on user experience, observability is no longer about seeing the system. It’s about steering the business.