5 Key Highlights on the European Observability Market in 2025
Observability is rapidly evolving as organizations across Europe embrace digital transformation, cloud adoption, and AI. As IT environments become more complex, traditional monitoring approaches are no longer sufficient.
The future of observability in Europe will be shaped by advancements in AI-driven analytics, regulatory requirements, sustainability goals, and the increasing need for proactive system intelligence. This shift will impact enterprises, public sector organizations, and technology vendors as they strive to optimize performance, enhance security, and control costs.
IDC’s MarketScape: European Observability Market 2025 Vendor Assessment evaluates the major players based on their observability portfolios, solutions, and go-to-market strategies. Key trends highlighted in this document include:
1. AI’s Role in the Observability Space
AI/ML will redefine observability in Europe by enabling automated anomaly detection, predictive analytics, and intelligent remediation. AI-driven observability platforms will help organizations move from reactive to proactive monitoring, identifying potential issues before they cause business disruptions.
One key development is AI-powered incident response, which correlates vast amounts of telemetry data (logs, metrics, traces) to detect patterns and surface actionable insights. This will reduce mean time to resolution (MTTR) and enhance IT efficiency. GenAI will assist IT teams by summarizing alerts, suggesting fixes, and automating routine tasks.
With the increasing adoption of AI observability tools, European enterprises will focus on data quality and contextualization to ensure accurate AI-driven decision-making.
2. European Regulations
Europe has some of the world’s most stringent data privacy and cybersecurity regulations and these will significantly influence the future of observability. Organizations must ensure that observability platforms align with regulations like the GDPR, the NIS2 Directive, the EU’s AI Act, DORA, and the CSRD.
These regulations will drive data sovereignty initiatives, pushing European businesses toward in-region observability solutions that ensure compliance with local data residency laws. Vendors will need to offer localized cloud services, on-premises deployment options, and sovereign cloud observability solutions.
3. The Value of Observability in Meeting Sustainability Goals
As sustainability becomes a top priority, European organizations will increasingly integrate GreenOps principles into their observability strategies. The focus will be on energy-efficient infrastructure monitoring, carbon footprint analytics, and sustainable FinOps.
Governments and enterprises will require sustainability observability dashboards to comply with the EU’s CSRD and ensure transparency in emissions tracking. Cloud providers and observability vendors will respond by embedding carbon intelligence features into their platforms.
4. The Rise of Open Observability Standards
To improve interoperability and avoid vendor lock-in, European organizations are embracing open source observability frameworks such as OpenTelemetry and Prometheus. These standards enable unified data collection across hybrid and multicloud environments, ensuring greater flexibility and cost efficiency.
As European enterprises prioritize vendor-agnostic observability, the market will see increased adoption of self-hosted and open source observability solutions, particularly among companies concerned about data sovereignty and compliance.
5. Security and Cyber-Resilience
With the rise of sophisticated cyberthreats, observability is becoming a key component of security operations. Security observability will integrate with SIEM and detection and response platforms, enabling real-time threat detection and automated incident response. Future observability solutions will focus on zero trust observability and AI-powered threat intelligence.
Conclusion
Observability in Europe will be driven by AI, regulatory compliance, sustainability, open source adoption, and enhanced security measures. Organizations will increasingly adopt intelligent observability platforms that provide end-to-end visibility across complex IT ecosystems, helping them optimize performance, mitigate risks, and achieve compliance. As these trends accelerate, European enterprises must invest in cutting-edge observability solutions to stay competitive in an evolving digital landscape.
Reach out to Filippo Vanara to learn more about how IDC can help you on your observability journey in Europe.
For more information about the upcoming EU regulations (specially regarding AI and ESG) and learning how to navigate these changes, adapt to new standards, and leverage Europe’s unique approach to digital governance as a competitive advantage, register for our webcast here: Simplifying EU Digital Regulations: Opportunities in ESG and AI
The Challenge of Leveraging CSRD for Value Creation
The EU’s Corporate Sustainability Reporting Directive (CSRD) aims to revolutionize corporate reporting via the transparent environmental, social, and governance (ESG) reporting of key performance indicators (KPIs), strategies, and monitoring. The CSRD’s impact has been substantial, with around two-thirds of EMEA companies reporting in accordance with the 2028 compliance deadline.
CSRD reporting standards — including more than 1,000 data points consolidated for certain industries — has elevated ESG data architectures to a new high and become an unspoken benchmark for ESG reporting globally.
Omnibus Simplification Package Creates Regulatory Uncertainty
In February 2025, the EU’s Omnibus Simplification Package was introduced, driven by the EU Competitiveness Compass, which aims to simplify sustainability reporting and reduce the administrative burdens on business and promote competitiveness. It presents far-reaching changes to the CSRD and other EU ESG regulations (e.g., the EU taxonomy, CSDDD, and CBAM). Key elements of the proposal include:
- The number of companies mandated to report is reduced by 80% by increasing company size to >1,000 employees.
- Small and medium-sized businesses are exempt from reporting but can adopt voluntary reporting standards (VSME).
- Within the ESRS, fewer and more simplified datapoints (KPIs) have to be reported and some will become voluntary.
- There will be no (mandatory) sector-specific ESRSs.
- Implementation of CSRD for the second wave of companies (large EU-based companies) is postponed for two years.
- The requirement for reasonable assurance is removed (only limited assurance required).
The proposal is under debate in the European Parliament and the European Council. A finalization — and thereby clarity for businesses — cannot be expected for several months.
At the same time, banks and other investors still require sustainability metrics for lending decisions and/or fund allocation to achieve their ESG targets and risk management. Consequently, even companies potentially now exempt from CSRD will face indirect ESG disclosure pressure, leading to a two-tier ESG reporting ecosystem: those who report for compliance and those who report for investors.
Finally, there is a small but growing number of companies that actually perceive sustainability (and ESG reporting) as a benefit, potential business growth driver and, thus, competitive advantage.
CSRD Maturity is Still Limited in EMEA
Our new research on the CSRD readiness of European businesses has shown that ESG regulation (and CSRD in particular) is still often perceived as a cost burden, as it requires additional resources, new skills, changes in data architecture and management, new technologies to be implemented — and a new level of collaboration across silos within the business and partner ecosystem.
CSRD maturity is still limited among European businesses. Only one in five EMEA businesses is in the mature stages of CSRD readiness, currently publishing or finalizing their first-ever CSRD report. They have invested substantially in human and technology resources to hit the crucial milestone and are looking to leverage the CSRD data, processes, and expertise to further generate value for the business.
Our CSRD Readiness Report reveals that CSRD-mature organizations consider ESG/sustainability practices pivotal for fostering innovations that improve business resilience and customer satisfaction. They rely extensively on the support of external service and technology providers, particularly to develop CSRD/ESG reporting strategies, implement ESG data management platforms, and leverage AI/GenAI.
This creates ample opportunities for business service providers and technology vendors. But it is essential to understand market segment maturity levels as well as differences in challenges and requirements (e.g., by geography, industry, company size) so as to adequately adapt solution design and go-to-market strategies.
Sustainability Initiatives Generate Business Value for EMEA Companies
On a positive note, our research results illustrate that becoming more sustainable is clearly perceived as being increasingly important for enterprise value creation. A significant number of European companies are seeing real business benefits generated by sustainability initiatives.
What business outcomes were achieved or are expected to be achieved within 1-2 years by your organization’s current or planned sustainability initiatives?
As shown in Figure 2, nearly half of EMEA companies see competitive advantages and innovation, and nearly 40% realized revenue and profit growth.
Interestingly, it is precisely these topics, innovation and growth, that European CEOs list at the top of their agenda for 2025 (as found in IDC’s February 2025 CEO Perspective on Technology Survey). So it comes as no surprise that investment in ESG/sustainability technologies remains among the top 3 technology investment priorities of European CEOs in 2025.
For technology and service providers, this implies that offerings increasingly need to focus on showcasing how sustainability solutions are geared toward these aspects. In particular, it will be critical to illustrate how CSRD reporting initiatives help to foster innovation and growth.
If you want to know more about our Sustainability research, visit our website here.
SecTech Vendors are the Most Trusted Providers of Consumer Protection
Employees are often highlighted as the first line of enterprise cybersecurity defense. But who – and what — safeguards our households as we become more connected and digital plays an ever-greater role in our personal and civic existence?
Consumer digital life protection (CDLP) solutions seek to provide the security and privacy controls that households need for their identities, devices, home networks, and digital transactions and interactions. These tools include everything from antivirus and password managers to VPNs and secure home networks.
However, with no security or IT department to advise or support them, are European consumers making the right choices about which technologies to adopt — and do they feel confident about deploying them?
IDC’s 2025 CDLP Survey, which included respondents from the three major European markets of the U.K., France, and Germany, provides insights into the home security goals and challenges of European households.
A Tormented Target Market
The research found that almost half of European consumers lack confidence in selecting the right CDLP solutions. Many simply don’t know what they need — and those that do know find it difficult to choose between the different offerings of different providers. Almost one-quarter of consumers say that CDLP solutions are too difficult to use. Finally, many are concerned about additional costs in their household budgets.In fact, affordability and ease of use are cited as the top priorities for European consumers when it comes to choosing CDLP solutions. Despite that, potentially advantageous bundled offerings are not so attractive. This suggests that vendors could do more to optimize such bundles and educate prospects on the benefits of a comprehensive package.
What would such packages need to deliver? The most common consumer complaints are forgotten passwords/password resets, but these are not the only challenge. Others include deteriorating PC performance, lost devices, virus infections, online scams, or simply becoming uncomfortable with the level of personalization in online ads and websites. Many users have suffered one or more of these incidents.
Accordingly, the top priorities for CDLP measures center on protecting PCs from viruses and malware and safeguarding ecommerce and ebanking transactions. Maintaining unique and complex passwords for each account and blocking access to phishing and sites that host malware are also very important.
Trusted Providers
When it comes to who consumers trust the most to meet their CDLP requirements, security technology vendors are the clear top choice, cited by one-third of respondents. Device or software vendors follow, mentioned in just over one-quarter of the interviews.
In terms of technologies, consumers are most willing to pay for VPN, secure home networks, and antivirus. For any given CDLP technology, between one-third and one-half of consumers opt for a free solution.
Spreading the Word
Reaching the market is also a challenge: Word-of-mouth recommendations from friends and relatives is the most frequent trigger for adoption of CDLP technology. Pre-installing solutions on new devices is also a dependable route to drive adoption.
Conversely, online advertising and news articles seem to have a limited impact. The techie uncle of the family can be as effective at driving purchase decisions as any glossy ad splash. This is a challenging audience to market to.
The European CDLP market surpassed $2.1 billion in 2023 and is projected to expand at a CAGR of 3.7% into 2029. Difficult digital experiences and a rising level of concern about the risk and exposure in consumers’ digital lives can drive adoption of premium CDLP solutions.
Nevertheless, CDLP vendors must improve awareness and understanding of their paid solutions and subscriptions. They may need to rethink their approach: Does the security message need to be simplified? Can the use of the products be more intuitive and automated — even invisible? What is missing in the education? Do consumers understand that if the product is free, they’re the product?
Security technology brands are trusted — and those companies need to find ways to leverage that trust through the word-of-mouth channel more effectively and generate a flywheel effects
The European findings of IDC’s 2025 CDLP Survey are presented in this report. Findings from the complete global survey are available here
Value-Driven DevOps and App Engineering in the AI Everywhere Era
In October 2024, our IDC colleague Jennifer Thomson published an excellent presentation, Value-Driven DevOps and App Engineering in the AI Everywhere Era.
Delivered at IDC’s 2024 DevOps Summit in London, the presentation delves into the future of modern app development and delivery. This future is driven by three key factors: developer experience and productivity, security resilience, and business empowerment.
The future of DevOps is app-centric, focused on user experience, value, and resilience by design. Platform teams play a crucial role in enabling effective app development and management.
The transformation integrates security, finance, and operations into the development process to create a seamless and automated software delivery environment. However, achieving “value-driven DevOps and app engineering” requires breaking down the silos between DevOps, CloudOps, and DataOps and creating smart integrations to meet business needs for speed, security, and cost efficiency.
According to IDC research, delivery excellence is defined by four strategic priorities:
Agility is the core business outcome BUT business agility is most negatively affected by current capabilities in the development processes of organizations.
As an answer to the question: ‘Which of the following areas are most negatively affected by your organization’s current software development and delivery capabilities?’, the following answers were given:
Apparently, many organizations are restricted in their ability to deliver excellence by their own development processes. However, with the rise of AI, things may change fast! A few recent IDC predictions (IDC FutureScape: Worldwide Developer and DevOps 2024 Predictions — European Implications, IDC Doc #EUR151753024) show:
• By 2028, natural language will be the most widely used programming language, creating 55% of net-new applications.
• By 2028, generative AI (GenAI) tools will write 70% of software tests, reducing manual testing and enhancing test coverage, usability, and code quality.
• By 2025, 50% of DevOps teams will use DevSecOps tools leveraging AI to identify security challenges in applications and supply chains.
• By 2026, 40% of new apps will be enhanced by AI, improving experiences and creating new use cases.
Incorporation of AI into the development processes of organizations promises to improve all 4 aspects of delivery excellence: increased speed of delivery, efficiency, quality and productivity, resulting in better business agility, meaning that the organization can respond to market changes faster and is able to provide more value, faster and better to its customers.
This sounds great! However, as management guru Peter Drucker one said:” You can’t control what you don’t measure”. And if you can’t control something, it’s very hard to improve it. This means that measurement of Delivery Speed, Product Quality, Efficiency, Productivity and ultimately Value
delivered, is an important management activity for organizations that are determined to control and to improve their delivery excellence and thus business agility.
As an example, using AI to code faster may result in better productivity, but when this code is not compliant to ISO 25010 or ISO 5055 standards for software quality, significant risk may be introduced into the application, potentially resulting in incidents, unhappy customers, loss of money, rework in the team, resulting ultimately in lower productivity and delivery speed, etc. In this case, measuring productivity and code quality are important to understand the overall performance of the teams, in relation to the quality produced.
IDC Metri, the tech buyer consultancy part of IDC, has years of experience in measuring these aspects on the team level. It offers the ‘Team Performance Optimization’ service to organizations that wish to understand and benchmark their current delivery excellence on team-level, and aggregate this to an organizational level. By benchmarking, it becomes clear which of the teams are high-performing (against industry averages) and which teams can use some help to improve. For many organizations, it would be helpful to create a baseline performance now, so they can see which AI initiatives result in improvement of the metrics, and which don’t.
For more information about measuring, benchmarking and/or optimizing (agile/DevOps) team performance, please contact me at hvanheeringen@idc.com.