When Observability Economics Break: The Case for Bring Your Own Cloud

New Omdia research shows that modern observability pricing forces teams to trade visibility for budget discipline — just when AI systems require more telemetry than ever.

Omdia Showcase (Informa TechTarget) January 2026 Authored by Torsten Volk, Principal Analyst, Application Modernization.

The Economic Problem

The observability stack isn’t failing technically.

It’s failing economically. Modern systems generate more telemetry than most teams can afford to collect—especially as AI workloads become production-critical. When every log line, trace, and metric increases your bill, teams do what they have to do:

• throttle collection
• sample aggressively
• instrument less than they want
• accept blind spots in the places that matter most

Why AI Makes This Worse

AI workloads don’t just increase telemetry.

They make sampling a liability.

In traditional apps, sampling can be “good enough.”

In AI systems, it’s often not.

Production LLM and RAG pipelines demand high-cardinality, high-volume visibility across:

• inference latency and throughput
• token usage and cost-per-request
• prompt and response payloads
• retrieval traces and quality signals
• drift and degradation over time

Because quality failures don’t always show up as errors, teams need to evaluate far more than a small slice of traffic.

Omdia’s research shows the market is stuck in a visibility trap:

Teams invest in powerful platforms—then starve them of the data required to deliver value.

Bring Your Own Cloud: Observability Without Fear

BYOC is a structural shift that changes the instrumentation calculus.Instead of paying an observability vendor more as your telemetry grows:

• your observability data stays in your cloud
• storage and compute follow standard cloud pricing
• the vendor charges a license fee for platform use—not by volumeThat means engineering teams can instrument proactively, not defensively.

What You’ll Learn

In this Omdia Showcase, you’ll learn:

• Why ingestion-based pricing creates visibility gaps — and why those gaps get worse with AI
• How BYOC decouples observability value from data volume
• Why eBPF + OpenTelemetry is becoming the foundation for low-friction instrumentation
• What it takes to handle high-cardinality telemetry without sacrificing query performance
• How self-service BYOC enables team-level adoption without enterprise rollout delays