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The end of zero interest rates has prompted businesses to look for savings where they can, but there is one area that remains a major drain on the budget. Observability—collecting and understanding data and systems—remains the second-highest enterprise cloud spend, right behind cloud provisioning itself. People have even gone so far as to talk about Observation cost crisisconfirmed by anecdotes such as Coinbase spending $65 million on Datadog bill.
Why is observability so expensive and important? Complex cloud architectures and microservices are here to stay, and with security issues and outages so common, operations teams need observability data to keep systems running.
Now called startup Dash0 They were launched to address the cost issue – if not by being cheaper, then at least by making it easier to buy and pay for their services.
Dash0 — pronounced “Dash-zero” — is a Datadog competitor whose pitch isn’t about dramatically cutting monitoring costs. Founder Mirko Novakovic (left in image above) still expects companies to spend 10% to 20% of cloud costs on this budget line. But he and his team want to improve transparency, both in terms of pricing and observability itself.
Dash0 says it can do this by how it’s built, by taking full advantage of the open source observability framework OpenTelemetry (also known as OTel), Novakovic told TechCrunch, which includes a feature called Semantic conventions This allows anyone, “at any time, to know exactly which service or which developer or which application is creating how much cost on the observability side,” he said.
Other companies, like Signoz, describe themselves as the original OTel, but Dash0’s positioning has resonated with investors. It has raised a $9.5 million seed funding round led by Accel, with participation from Dig Ventures, the investment firm of MulesSoft founder Ross Mason.
Novakovic’s record may have helped, too. IBM acquired his former company Instana, also backed by Accel, at the end of 2020 for $500 million, a price that had not previously been publicly disclosed. Many other Instana graduates also became part of the Dash0 team.
If Dash0 is based on OTel, it also tries to improve it. The framework has already been in place since 2019, but “it is not easy to use at the moment,” Novakovic said. “Vendors have a lot of work to do to make sure it’s at least as easy as installing a Datadog agent. This is where we still lag behind landlords.
As a company, Dash0 hopes to unleash the benefits of OTel — unified data not tied to vendors — but through an intuitive user interface, dashboards, and integrations with Slack, email, and other tools. The initial target customers are companies with between 50 and 5,000 employees.
The company is now launching publicly, but will not invest significantly in sales and marketing until it is sure it has reached product-market fit. In the meantime, Novakovic said, his resources will be directed toward growing the technology and product side of his team, which now consists of 21 people, including 19 engineers, all working remotely.
The next 10 hires will include a developer relations specialist who will also help drive the adoption of OpenTelemetry as a powerful alternative to proprietary options. On this front, the company intends to work with other OTel-related startups while making sure that the “missing pieces” like dashboards and query languages fall into place with projects like Perses and PromQL. “This is a community effort in collaboration with customers,” Novakovich said.
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