The end of zero-interest rates has driven companies to look for savings wherever they can. One area that continues to be a major budget drain is observability, which involves collecting and understanding data and systems. Observability is typically the second-highest cloud expenditure for organizations, following cloud provisioning itself. There have been discussions about an observability cost crisis, with examples like Coinbase spending $65 million on its Datadog bill.
Observability is crucial due to the prevalence of complex cloud architectures and microservices. With security issues and service outages common, operations teams require observability data to ensure systems run smoothly. In response to the high costs associated with observability, a new startup called Dash0 has emerged to address the issue.
Dash0, pronounced “Dash-zero,” is a competitor to Datadog. Although the company does not promise drastically lower observability costs, its focus is on making it easier for customers to purchase and pay for their services. Founder Mirko Novakovic acknowledges that companies are likely to spend between 10% to 20% of cloud costs on observability. However, Dash0 aims to enhance transparency in pricing and observability itself.
The company utilizes the open-source observability framework OpenTelemetry (OTel) to achieve this goal. By leveraging features like Semantic conventions, Dash0 enables users to track the exact costs associated with observability for specific services, developers, or applications. While other companies like Signoz also describe themselves as OTel-native, Dash0’s approach has resonated with investors. The company recently secured a $9.5 million seed funding round led by Accel.
Novakovic’s successful track record, including the acquisition of his previous company Instana by IBM for $500 million, has contributed to Dash0’s credibility. The team includes several former Instana employees. Despite being built on OTel, Dash0 is focused on enhancing the framework to make it more user-friendly. The company offers an intuitive UI, dashboards, and integrations with tools like Slack and email.
Dash0’s target customers are companies with 50 to 5,000 employees. While the company is launching publicly, it plans to prioritize product development over sales and marketing initially. The team, consisting of 21 members, with a majority being engineers, will focus on enhancing the technology and product offerings. Dash0’s future hires will include a developer relations specialist to drive the adoption of OpenTelemetry as a viable alternative to proprietary solutions.
Additionally, Dash0 aims to collaborate with other OTel-related startups to address gaps in areas like dashboards and query languages. This collaborative effort with customers and the community is vital for the company’s growth and success. By focusing on improving OTel and providing user-friendly solutions, Dash0 is poised to make a significant impact in the observability technology space.
