Driving Agility, AI Adoption, And Business Growth With Full-Stack Observability

A COMMISSIONED STUDY CONDUCTED BY FORRESTER CONSULTING ON BEHALF OF CISCO, OCTOBER 2024 Driving Agility, AI Adoption, And Business Growth With Full-Stack Observability

Drive agility, AI adoption, and business growth with full-stack observability In a study of IT infrastructure and operations strategy decision-makers across a wide range of industries and regions, Forrester Consulting found that technical and business agility remain top challenges and that IT leaders are solving them with observability and AI solutions. Notably: • 70% are adopting AI into IT operations to meet business demand. • 69% report that observability across their full stack is now a requirement. • 62% are measured by business and financial operations KPIs. Yet, many say they struggle to identify causality of issues across domains. The solution: There is a critical IT need for full-stack, cross-domain, business-centric observability solutions that leverage and observe AI. ABOUT FORRESTER CONSULTING Forrester provides independent and objective research-based consulting to help leaders deliver key outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute their specific priorities using a unique engagement model that ensures lasting impact. For more information, visit forrester.com/consulting. © Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. [E-60635] Project Team: Kate Pesa, Market Impact Consultant Jemimah Charles, Associate Market Impact Consultant Contributing Research: Forrester’s technology architecture and delivery research group © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 2 3

Business and IT agility are critical, yet IT lacks insights across operational domains While IT agility is more important than ever, IT teams lack contextual insights across operational domains. IT leaders report that IT agility is crucial for driving business agility. Yet, monitoring data, tools, and processes that should enable IT agility often hinder IT teams from scaling operations to support business growth. 67% Despite investments in tools, most respondents’ organizations still can’t generate insights that consider business context across operational domains. The need for business agility has risen significantly over the past three years. Teams are increasingly measured by BizOps and FinOps (business and financial) KPIs. IT agility is crucial for driving business agility. 68% 62% 65% 65% Siloed data, tools, and processes hinder efficiency and, ultimately, growth There is an increased need for real-time changes and proactive actions within the IT infrastructure. 65% 65% There is significantly more data in our IT environment today than ever before. A data pipeline architecture for telemetry data is critical for successfully gaining insights across domains. Our monitoring data, tools, and processes are too siloed for efficient utilization across the enterprise. 63% Our monitoring data, tools, and processes are too siloed and hinder us from scaling operations to meet business growth without significant investment. 55% Base: 213 IT infrastructure and operations strategy decision-makers Source: A commissioned study conducted by Forrester Consulting on behalf of Cisco, May 2024 5 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 4

Hybrid and on-prem environments are not going away soon — if ever — and IT teams need a consolidated observability solution IT teams need holistic observability solutions that support their hybrid and on-prem environments. For many, the best option is to consolidate tools and vendors and move toward a holistic solution. AI adoption is happening fast and driving the need for full-stack observability AI adoption is underway to meet business needs and reduce costs. To keep up with the complexity of delivering digital services to the business, IT operations teams are turning to AI, too. 68% of respondents’ organizations have a hybrid environment that includes both legacy (n-tier) and cloudnative applications across on-prem and multicloud. 64% of respondents say their organization would like to consolidate its monitoring technology portfolio. 62% of respondents prefer an integrated observability solution for their organization’s hybrid and cloud-native environments vs. a best-in-breed solution across these different environments. My organization is adopting AI in our IT operations at a pace that meets the demands of our business. Our IT operations must become AI-driven to keep up with the increasing complexity of delivering digital services for the business. Observability across the full stack has become a requirement given the business impact of digital experience and speed driven by AI innovation. IT operations will require AI to improve operational and cost efficiencies for the business. 70% 66% 69% 64% Base: 213 IT infrastructure and operations strategy decision-makers Source: A commissioned study conducted by Forrester Consulting on behalf of Cisco, May 2024 7 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 6

Resistance to change is the top barrier to a full-stack observability solution While most organizations want a comprehensive, full-stack observability solution, IT leaders report they must first overcome these top barriers: Internal pushback around organizational change 1 Lack of resources 2 Insufficient approved budget for full effort 3 Lack of the necessary infrastructure 4 Too much technical debt 5 However, IT priorities reflect the need for holistic, full-stack observability “Rank the following domains in terms of how you prioritize the target of your observability platform program.” (Top 5 ranked) IT operations Applications Security IT service management (ITSM) Data management Infrastructure Networking/telecom Cloud Support Storage Monitoring Middleware 59% 51% 50% 47% 44% 43% 41% 41% 35% 32% 31% 24% Base: 213 IT infrastructure and operations strategy decision-makers Note: Individual percentage values may not sum to totals due to rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of Cisco, May 2024 9 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 8 Base: 201 IT infrastructure and operations strategy decision-makers at organizations that have either started or are interested in an observability platform Source: A commissioned study conducted by Forrester Consulting on behalf of Cisco, May 2024

IT leaders foresee sizable benefits from a consolidated, holistic observability solution Significant benefit Transformational benefit Improved proactive operational posture Improved predictive analytics Improved data-driven automation and remediation capabilities Improved operational and process analytics Improved infrastructure and operations management IT agility Improved ability to detect operational anomalies and root cause Improved operational awareness and reduced alert noise Improved customer/end-user experience when engaging with the organization andits systems Improved real-time monitoring and technical system awareness Increased ability to support business agility Improved MTTD and MTTR Improved quality of notifications, routing, and communications during service interruptions/outages 36% 35% 35% 35% 26% 29% 33% 34% 34% 33% 34% 32% 36% 31% 31% 30% 30% 38% 34% 30% 28% 27% 25% 23% 23% 18% 67% 66% 65% 64% 63% 63% 62% 62% 61% 59% 56% 55% 54% TOTAL Base: 213 IT infrastructure and operations strategy decision-makers Source: A commissioned study conducted by Forrester Consulting on behalf of Cisco, May 2024 11 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 10

Key Recommendations Run IT operations through a business lens. IT agility is more important than ever, yet IT teams report they lack insights that consider context across operational domains. Because both business and IT agility are top goals, IT must run operations through a business lens. Leverage AI. There is a critical IT need for a full-stack, cross-domain, business-centric approach to observability with solutions that both incorporate AI for efficiencies and observe AI implemented in business applications. Build a strong business case. IT leaders recognize the significant benefits of full-stack observability, but resistance to change and resource constraints mean leaders must build a strong business case to fund their observability programs. Keep security top of mind. Fifty-eight percent of respondents state their organization’s IT observability solution should also help developers and application operations teams efficiently solve security issues of applications they own. Furthermore, 30% report that preventable security breaches/incidents have occurred, although that number is likely much higher than reported. Application security is an important element of a comprehensive, fullstack observability solution. Methodology In this study, Forrester conducted a global online survey of 213 IT infrastructure and operations strategy decision-makers. The study began and was completed in June 2024. Note: Percentages may not total 100 due to rounding. REGION APAC 35% EMEA 33% NA 32% COMPANY SIZE 500 to 999 employees 18% 1,000 to 4,999 employees 42% 5,000 to 19,999 employees 27% 20,000 or more employees 13% RESPONDENT LEVEL C-level executive 13% Vice president 20% Director 32% Manager 35% Demographics 13 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 12

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