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Apica: Building an end-to-end observability solution

Oxx I portfolio company Apica acquires

Having the right amount is one of the central problems of software monitoring and observability: there's always too little data and too much data, all at the same time. Oxx portfolio company Apica tackles the former problem by applying synthetic monitoring to evaluate the performance of critical transactions and customer flows. We’re delighted to share that Apica has now acquired, an observability data fabric startup, which makes sense of the latter problem by better indexing, cleaning and storing observability data.

What Apica does

Apica sells one of the market’s most sophisticated synthetic monitoring software suites. In synthetic monitoring, a company simulates a user action within an application and monitors the health of the application based on the output. While synthetic monitoring is usually categorised as part of the application performance monitoring (APM) landscape, there's a big difference: traditional APM is reactive and synthetic monitoring is proactive. Most of the large, traditional APM players have synthetic monitoring offerings, but not all handle complex IT environments equally well. Apica shines when a customer needs to simulate multi-part transactions that might combine owned and 3rd party SaaS tools, or cloud- and on-prem- infrastructure.

Transition to observability

Over the past few years, the infrastructure and software stacks of most companies have grown increasingly fragmented. Classic APM software, designed to monitor monolith applications for known failure points, is no longer suitable. Observability - knowing the health of a system at any point in time by collecting all metrics, logs and traces - has emerged as the new goal. But current reality lags behind, resulting in teams wading through an information deluge of semi-redundant data stored in dozens of vendor-specific platforms.

In 2022, Apica's new leadership team saw an opportunity: there was a clear market need for vendors that could help companies make sense of the mountain of observability data that piled ever higher. Synthetic monitoring was one such tool: it provided complementary data that supported root cause analysis and plugged data gaps. It would be more powerful paired with another tool to sort through the observability data.

Meanwhile, Apica's customers - which count several of the world's top 25 financial services companies - had become increasingly concerned about ballooning costs of observability data storage, especially as many had been pressured into abandoning their on-prem data stores. This has been discussed as a problem that will generate startup innovation for a few years, but over the past six months this FinOps problem has gotten significantly more attention. As one of Apica's customers puts it, "should I spend $20m per year on my APM vendor, or should I create a better migration tool [to pre-clean the data] without the large expenditure? We want to keep 6-12 months of live data, and if we put all of the data into an external cloud environment that would be exorbitant."

There are a few different solutions to tackle this problem. Catching data at a point between where it's generated and where it's stored for refining and cleaning is one solution. Storing data less expensively is another. In Logiq, Apica has found a solution that does both.

Why Logiq is the logical next step for Apica

Logiq has built an observability data fabric (a data pipeline and data lake specialised for observability data). The software indexes observability data at its source location, allowing for much quicker and cheaper raw data aggregation and optimisation from any observability data sources. It's like a high tech sieve: you throw in observability data from lots of different places and in lots of different formats, trim off the excess, and out comes neat, clean data in the structure and format that you want. It sounds simple, but it’s actually very hard to do: most observability pipelines only take in the data that's easy to collect. And while adoption of Open Telemetry standards is accelerating, truly vendor-agnostic solutions remain rare. Customers can then port this refined data into a single platform - either Apica's own, another vendor platform, or their own - to analyse and store the data at much lower cost.

As with most thorny software problems, there's a number of other startups also working to tackle the above problem., having raised $400m to date, is one of the highest profile startups. It tackles the observability data overload problem via a data pipeline solution that collects, refines and routes data to any destination. BigPanda takes a slightly different approach, focusing on reducing the alert fatigue by more intelligently crawling observability data to feed only actionable intelligence to the ITOps teams. Betterstack, a Czech company that recently raised a Series A round led by Creandum, an all-in-one log analysis company, reduces costs via a better data storage approach. Overall, IT observability startups have raised $2bn in funding over the past two years alone, against the backdrop that the overall observability market is expected to reach ca $20bn by the start of 2025.

What makes Apica's new offering unique on the market is the merger of an observability data fabric with synthetic monitoring. With the observability data now stored in a single location, it becomes easy to see where synthetic monitoring can augment the result and plug the remaining data gaps. Discussions with the analyst community confirm the potential of this joint observability and synthetics approach. In particular, this has validated the market opportunity to capture traces tied to requests generated by synthetic monitoring as a way to baseline observability data and capture anomalies.

Where next?

Apica is rolling out the new product to customers in the coming months, and at Oxx we're incredibly excited to see where the Apica team takes this next. It's often lost in mainstream observability buzz, but several large potential observability customer segments simply haven't been able to partake in the observability explosion of the past few years. This includes enterprises who cannot move their operations fully to the cloud for regulatory reasons. It also includes customers with industry-specific "hard-to-connect" data sources such as telcos. Apica's new product opens end-to-end observability to these customer groups.


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