Deep Observability Market Forecast to Approach $2B by 2029
The last few months of the Observability market have been dominated by Cisco closing its acquisition of Splunk and incorporating Splunk into its broad Cisco networking and security portfolios. In doing so, Cisco is reprioritizing the security and observability components of Splunk, which will drive an absorption period in the Observability market before it returns to growth. Company acquisitions and the absorption of enterprise networking equipment from the pandemic surge caused 1H’24 Observability results to come in below 650 Group’s forecast projections. However, there is still robust demand, so we see the absorption as a temporary slowdown in the markets, not a change in the overall growth and importance of the technology.
Deep Observability will play an essential role in 2H’24 as enterprises look towards the technology to help democratize the NetOps, DevOps, and SecOps silos and help get the enterprise ready to embrace AI. This is especially important as training and inference will introduce more Cloud touch-points and additional networking intensity for on-premise networks. We also expect additional features around encrypted traffic to give complete visibility and additional automation to those AI data paths.
The Deep Observability Market thrived in 1H24. Gigamon remains the largest vendor in this segment. Forecasting the full year 2024, we expect the market to grow over 30 percent Y/Y and approach $500M. Additionally, concerning our 5 year forecast, we expect the Deep Observability Market to grow at over a 30 percent CAGR and approach $2B by 2029. The Deep Observability Market is on track to outpace the overall Observability Market growth in 2024.