The latest Splunk State of Observability 2025 report outlines the influence of observability on business outcomes, AI adoption, and digital experiences in Australia and across the globe.
The study, based on survey responses from 1,855 IT operations and engineering leaders worldwide, indicates that observability is increasingly recognised not only as an operational tool but as a central element in strategic business decision-making.
The findings show that 75% of respondents globally believe observability has improved employee productivity, 65% note its positive impact on revenue, and significant numbers credit observability with shaping customer experience strategies (69%) and influencing product roadmaps (64%).
Australian trends
Australian organisations display stronger engagement with both advanced observability practices and artificial intelligence technologies than their international counterparts.
Forty-five percent of Australian respondents express enthusiasm about the benefits AI brings to their teams, compared with a global average of 36%. In practice, 21% of Australian organisations report they often or always use emerging AI technologies, such as agentic AI, compared to 18% globally.
Australian businesses are also reporting results from these initiatives. Eighty-seven percent say AI adoption has allowed them to dedicate more time to innovation rather than system maintenance, a figure notably higher than the global average of 78%.
Additionally, only 37% of local respondents say they are spending less time than they would like building new software, compared to a global figure of 45%. This suggests Australian engineers have more capacity to pursue work they consider high-value.
Australian organisations anticipate pronounced benefits from AI in observability: 72% expect AI to improve troubleshooting and root cause analysis, outpacing the global average by 12 percentage points. Further, 36% say they often or always use OpenTelemetry-an industry standard tool for observability data collection-while 26% globally report similar usage.
Importantly, 79% of Australian organisations using OpenTelemetry at least sometimes say it is positively influencing revenue growth, compared to 71% across all regions. These results reflect a trend where technology investments are translating directly into measurable business results.
"Australian businesses are showing the world what's next: AI and observability working hand in hand to deliver real, measurable results. As organisations embed AI across every layer of operations, observability is emerging as the confidence layer that makes innovation scalable and sustainable. It's what gives leaders the visibility to understand how AI is performing, where it's adding value, and where risks lie," Christine Low, Head of Observability, Asia Pacific and Japan at Splunk.
"This momentum reflects a broader shift underway across Australia - from adopting AI to operationalising it. Local teams are using observability to spend more time innovating, building, and delivering exceptional digital experiences rather than maintaining systems. This evolution shows that Australia isn't just leading in technology adoption; it's leading in how technology translates to business impact," Christine added.
Global insights
The global research underlines that digital experiences remain a primary channel for customer engagement, with observability informing strategic choices regarding customer journeys and product development. Seventy-four percent find observability central to monitoring business processes, while 65% identify it as key to understanding user journeys.
Patrick Lin, SVP and GM of Observability, noted, "Observability practitioners are becoming critical stakeholders to key business decisions in customer engagement strategies, product roadmaps and more. And this year's State of Observability report findings make that clear: the full life cycle 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."
Challenges in the AI era
The report finds that the deployment of AI is bringing both opportunities and complexity to IT operations. While 76% of respondents say they regularly use AI-powered observability, 47% report that monitoring AI workloads has made their tasks more challenging and 40% see lack of expertise as an obstacle to achieving AI readiness. These challenges signal an ongoing need to upskill IT professionals for managing AI-specific workloads.
Sixty percent of respondents predict that AI will positively impact troubleshooting and root cause analysis, and 58% believe it will improve security vulnerability detection. However, the proliferation of tools (59%) and high rates of false alerts (52%) remain ongoing operational hurdles.
OpenTelemetry adoption
The survey highlights OpenTelemetry as an established standard for observability data collection, with adoption bringing business advantages. Seventy-two percent of adopters report a positive impact on revenue, with 71% noting improved operating margins and enhanced brand perception.
Organisations describing themselves as "power users" of OpenTelemetry report three times greater gains in employee productivity and twice the improvement in customer experience. Nearly half (47%) state they never panic during customer incidents, compared to 32% of non-users. The report also notes the strategic use of observability-as-code among frequent OpenTelemetry users, with 57% embracing this DevOps practice, while adoption among less frequent users lags at 10%.
Observability leaders and ROI
The report defines a group of "observability leaders" who consistently achieve higher business value from their practices. Leaders generate an annual ROI of 125% from observability, a figure 53% higher than the average among their peers, due to factors such as reduced system downtime, improved customer satisfaction, and faster incident response times.
These organisations are more likely to use advanced techniques, including code profiling for root cause analysis-where 78% report dramatically improved speed-and foster collaboration between observability and security teams. Fifty-nine percent of leaders state they are able to share and reuse data more effectively, and 44% say their IT, engineering, and security teams work closely together to resolve issues.
Shannon Kalvar, Research Director at IDC, commented, "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."
The Splunk State of Observability 2025 report concludes with the observation that as enterprises increase their AI investments, observability is becoming essential for supporting data-driven decision-making and operational resilience in the digital economy.