RESEARCH NOTE: Dynatrace Elevates Data Observability and Monitoring with AI Automation

By Robert Kramer - January 15, 2024
Free Illustration from Pixabay and Dynatrace

New developments in data observability and monitoring have impacted how businesses operate. While monitoring continuously checks the health and performance of systems,  observability provides a deeper understanding of complex systems, helping businesses proactively tackle issues to maintain secure, adaptable, and efficient data operations in a constantly changing digital environment.

This is where Dynatrace comes in. Its platform includes enterprise-grade observability, security, analytics, monitoring, and automation features. A key aspect of Dynatrace is its AI technology, which uses advanced AI techniques to improve business performance. In this piece, I’ll dig into the specifics of Dynatrace’s operations; first, though, it’s worth highlighting the differences between observability and monitoring.

Differentiating Observability and Monitoring

Originally, monitoring focused on consistently observing a specific system’s health and keeping track of selected metrics and logs to ensure that the system operated within expected parameters. Recent improvements in monitoring tools now allow them to work across the different parts of a business’s IT infrastructure, providing real-time notifications and visual dashboards for better oversight.

Observability builds on this to better understand complex systems. Unlike traditional monitoring, observability allows IT experts and data analysts to quickly identify, investigate, and understand the root causes of problems. Observability tools gather various data types, including logs, performance metrics, execution traces, and event information, then use complex analytics to form a detailed picture of a system’s internal workings.

This is especially useful in managing complex structures like cloud-based systems or distributed networks. It enables real-time identification of issues such as system bottlenecks or operational failures, as well as fuller understanding of their underlying causes, including anything from server performance issues to coding errors. Using these insights, IT pros can diagnose and resolve problems much more effectively.

Development Of Dynatrace

Dynatrace, established in 2005 in Linz, Austria, and now headquartered in Waltham, Massachusetts, is known for incorporating AI and cloud-native technologies into its observability and monitoring tools. The company, which has a global workforce exceeding 4,500, has shown financial growth in recent years. In 2023, Dynatrace’s annual revenue amounted to about $1.2 billion, up nearly 25% from 2022.

An illustration from Dynatrace of its analytics and automation platform

What Dynatrace Brings To The Table

Dynatrace’s platform is designed to observe any type of IT environment, including traditional server-based architectures, multi-cloud and hybrid environments, microservices, and serverless functions. As shown in the diagram above, it encompasses real-time application and infrastructure observability, security, business analytics, automation, and more. It can scale to hundreds of thousands of hosts.

From an observability perspective, the platform provides continuous auto-discovery of hosts, VMs, serverless applications, cloud services, containers, networks, devices, logs, events, and more to ensure optimal application performance and system health. From a security perspective, the platform detects, analyzes, and responds to potential security threats and safeguards sensitive data. These capabilities protect applications at runtime against cyber threats.

Dynatrace’s digital experience capabilities enable analysis of customer interactions, enhancing user engagement and satisfaction. The platform offers business analytics that link IT metrics to business outcomes for improved business results. Additionally, Dynatrace provides customized solutions tailored to the unique monitoring and analytics needs of each customer. For automation, it builds on its observability features and leverages AI technology to automate various tasks and processes. These automations can be integrated with existing IT service management (ITSM) and DevOps tools to support better coordination and collaboration among IT teams, developers, and security professionals.

Dynatrace’s Davis AI handles complex observability and security challenges by combining generative, predictive, and causal AI. In July 2023, Dynatrace introduced Davis CoPilot, a generative AI feature that enhances the platform by adding a layer of AI-driven automation and intelligence. Davis CoPilot assists in several ways, including providing coding recommendations by analyzing coding patterns, translating technical data into understandable natural language, and automating routine tasks to streamline operations.

Another platform feature is Dynatrace’s AutomationEngine, designed to streamline workflows in coordination with Davis AI. For instance, if Davis AI discovers a performance issue in an application, AutomationEngine can respond by scaling resources or rebooting services to address the problem effectively. Smartscape is another feature that provides an observability model covering applications, services, processes, hosts, and data center layers. This model is designed to map and visualize connections and dependencies in IT environments.

Other features of the Dynatrace platform include AppEngine for creating secure and compliant applications; Grail, a data lakehouse; Unified Ingest, which leverages OpenTelemetry to access a variety of tools, APIs, and SDKs for more insights into application performance; OneAgent, which uses single-agent technology to automate collection and analysis of data from the application environment; and PurePath, Dynatrace’s proprietary tracing technology.

Competitive Landscape

Dynatrace competes with numerous companies offering observability solutions. Among these competitors is New Relic, known for its comprehensive application performance management (APM) tools, which include real-time monitoring and strong cloud-native features. Datadog is another key player, providing a broad range of monitoring products with a unified interface to address diverse monitoring requirements. Splunk, initially a leader in log management, is expanding its offerings to include APM and is in the process of being acquired by Cisco. SolarWinds targets smaller businesses and offers on-premises solutions.

Other notable competitors include LogicMonitor (covered in this previous article), which seamlessly integrates logs and metrics within a single platform. In the area of cloud-native APM, Microsoft’s Azure Monitor and Amazon’s CloudWatch are significant offerings. AppDynamics serves the needs of large enterprises. Meanwhile, open-source solutions such as Prometheus and Grafana are gaining popularity due to their scalability and flexibility, but their cost savings may be offset by an increase in manual management overhead. Each of these competitors differs in areas such as pricing, user-friendliness, and specific monitoring features, thus appealing to a diverse range of organizational needs and sizes.

As a caution, Dynatrace has a longer learning curve for newcomers than some other solutions, requiring additional time and effort for users to become proficient. The complexity of the solution could be overwhelming for smaller customers, and the platform’s most advanced modules might offer more capabilities than are needed for simple IT environments. On the plus side, a Dynatrace platform subscription can make it easy for customers to commit to a fixed spending level and use its capabilities without the restrictive overage charges of some of its competitors. This combination of factors makes it more suitable for larger or more technically advanced customers that can fully leverage its capabilities and justify the investment.

Dynatrace’s platform pricing structure ranges from low-cost ingest for raw data to premium options such as full-stack monitoring. This portfolio approach allows each app team to opt in for the right level of tooling based on its business and technical requirements.

Partnerships and Integrations

Dynatrace’s technology partnerships and solution partners are essential to its customers in the cloud observability and security market. Dynatrace’s partnerships enable customers to enhance their existing technology environments with additional tools and features for improved cloud infrastructure monitoring, advanced security, and deeper analytics. These partners bring specialized expertise and insights, helping customers to implement, configure, and get the most out of Dynatrace’s offerings.

Dynatrace integrates with major cloud providers to enhance application monitoring and performance management. It offers seamless integration with AWS services for real-time application insights, is optimized for Microsoft Azure environments with full stack visibility, and provides dedicated monitoring solutions for applications on the Google Cloud Platform. Additionally, Dynatrace supports containerized applications on Red Hat OpenShift, ensuring efficient operations and performance. This diverse compatibility allows Dynatrace to deliver comprehensive monitoring solutions across various cloud platforms.

Dynatrace integrates with IT service management (ITSM) platforms for enhanced incident management. Its integration with ServiceNow automates the incident resolution process by streamlining the workflow and creating tickets for detected issues. With BMC Helix, Dynatrace’s AI-powered insights are seamlessly integrated into BMC’s ITSM workflows, enhancing the efficiency and effectiveness of IT service management.

Dynatrace Hub is the central location for exploring over 600 integrations and activating all the capabilities of the Dynatrace platform. It gives users a single point of access to discover new features, install extensions, create a customized experience, and stay updated with the latest platform developments.


As I look ahead for what might emerge in 2024, the observability sector is increasingly gaining relevance for data governance and security. The insights supplied by Dynatrace’s technology help identify risks and performance problems, supporting better data governance and security. In an environment where breaches and cyber threats often challenge data management, such tools can aid in preserving data integrity and security.

I see the observability and monitoring landscape continuing to evolve, primarily driven by the increasing complexity of IT systems and the pressing need for more effective data management. Integrated observability platforms offer a more complete and interconnected view of applications, networks, and infrastructure. Introducing sustainability metrics into these observability platforms is an advanced development. These metrics will be able to track the energy consumption, carbon footprint, and resource efficiency of IT systems. By factoring in these environmental considerations, businesses can monitor and reduce their ecological impact, contributing to broader sustainability efforts, at the same time they save costs by operating more efficiently.

From what I can see, developments such as Dynatrace’s use of AI will continue to enhance our understanding and management of complex IT infrastructures. Dynatrace and other innovators in the space are introducing new approaches to better analyze and control our increasingly sophisticated technological environments. Looking forward, I believe we can anticipate a year of significant progress in these areas.

VP & Principal Analyst at Moor Insights & Strategy | + posts

Robert Kramer is vice president and principal analyst covering enterprise data, including data management, databases, data lakes, data observability, data analytics, and data protection. Robert has over 30 years of proven experience with startups, IT companies, global marketing, detailed strategies, business modeling, and planning, working with enterprise companies, GTM assets, management, and execution.