The New Relic Study shows that AI adoption is the number one driver of observability demand in India; usage of AI monitoring experienced double-digit growth rate in the past year
Intelligent Observability company New Relic has released its 2025 Observability Forecast, the industry’s most comprehensive report on the state of observability. Surveying over 1,700 IT and engineering leaders and team members across 23 countries and 11 industries, the global report highlights key focus areas, challenges, and trends influencing observability investments like the growing adoption of enterprise AI. The data showed that the cost of any digital business downtime is profound—with high-impact outages carrying a median cost of $2 million USD per hour globally, or approximately $33,333 for every minute systems remain down. For India specifically, the annual median cost of high-impact IT outages for organisations surveyed is $76 million USD per year–on par with the global figure.
The research highlighted that the need to observe AI is dominant in India, as adoption of AI continues to grow rapidly. The research also found a decrease in the number of observability tools used by organisations, and that tool consolidation has become a growing priority, signalling the value organisations in India gain in removing data siloes and increasing visibility across the tech stack.
Outages are expensive and distract engineers from innovating
The global research revealed the top three primary causes of outages—network failure, third-party or cloud provider services failure, and deploying software changes. These outages are frequent and costly for organisations in India. Thirty-nine percent of organisations report experiencing high-business-impact outages at least once a week, with 10% seeing them daily, and 3% facing them multiple times per day. The financial impact of these outages is huge. Nearly half (45%) stated that these disruptions cost their organisations between $1-3 million USD per hour in lost revenue. The median annual cost of high-impact outages for Indian organisations is $76M.
Increasing AI adoption heightens awareness of visibility challenges
As large-language-model-powered applications and agentic AI become more widely adopted, they introduce new visibility challenges that traditional monitoring methods cannot solve. Without modern observability built for the AI era, silent issues can ripple through systems unnoticed. The research shows that organisations in India are aware of these challenges, as almost three-quarters of respondents (73%) use observability’s AI monitoring capabilities, up from 57% in 2024. This is also well above the Asia Pacific average of 45%.
Complexity and fragmentation of the observability ecosystem remain a challenge
Complexity and fragmentation are continuing to plague India’s observability ecosystem. Nearly half of the respondents (44%) cite a complex tech stack as their top challenge, representing a notable 9-point increase from 2024. In addition, 33% cite an excess of monitoring tools and siloed data as major blockers to achieving full stack observability, and 29% report that internal resistance to change is another key barrier. While these challenges mirror broader Asia Pacific patterns, they’re especially acute in India’s fast-growing tech ecosystem where innovation is abundant, yet the complexity of the tech stack and siloed data complicate simplification efforts.
“The findings of this year’s Observability Forecast point toward two clear themes for Indian organisations: AI-strengthened observability investment is a key priority, and outages are too frequent and costly,” said New Relic Senior Vice President and General Manager Asia Pacific, Rob Newell. “While most Indian organisations understand the benefits of embracing AI, many are also still choosing to accept the multimillion-dollar cost associated with outages and tool sprawl. The solution is clear: companies that embrace intelligent observability across their entire technology stack experience less downtime, fewer critical outages, and high ROI, enabling them to achieve their core business goals.”
