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What Is Application Performance Monitoring (APM) In 2020?

Our goal in this chapter is to explain the foundation of APM and highlight the trends for 2020. If you’re new to APM or work in APM, this is an excellent primer on the industry today.

The application performance monitoring industry has undergone quite the evolution in recent years, and it shows no signs of slowing down. As applications themselves increase in complexity, and big data become the rule (not the exception), organizations are turning to APM tools that can help them monitor the performance, availability, and user experience of their software applications.

Gartner predicted in 2018 that APM would monitor 20% of all business applications by the year 2021. According to Intricately, there are at least 400K businesses around the globe that should be deploying APM solutions. When we say businesses, we’re referencing companies that buy enterprise cloud infrastructure. The reality is that everyone using cloud-based apps needs an APM solution, but our focus is on the commercial upside for you. More info to follow.

That predicted industry growth is reflected in the trend toward public companies as well, with four of our five key players (see chapter 4) already achieved an IPO and two with market caps over $10 billion.

This chapter will explore the background of this fast-paced industry: some key terms, how the broader software community views APM, and how Intricately defines APM tools. If you’re new to APM or interested in buying APM, this is an excellent chapter for you.

What is APM in 2020?

At its core, application performance monitoring is all about “understanding the ‘why’ as fast as possible. When it comes to monitoring the performance of applications, speed, and proactivity are critical. Why is your app running fast or slow, or why is an end-user encountering a specific issue? Proactive APM is the answer. 

Without an APM tool, many organizations will find themselves in a position of being reactive to issues as they arise. While this could be manageable in the early days, it’s rarely scaleable, and the ultra-competitive landscape for software will often render these reactive solutions impractical. 

Let’s take a look at the three types of APM tools, according to Stackify

  1. App Metrics based – Some tools use server and app metrics and include themselves under the APM umbrella. They communicate how many requests your app is receiving, which apps are slow, but not why it is slow.
  2. Code-level performance – These tools focus on code profiling and transaction tracing, so more along the lines of your “typical” type of APM solution. New Relic, AppDynamics, Dynatrace, and Stackify Retrace are examples.
  3. Network-based – Some tools (for example, Extrahop) measure an application’s performance based on their network traffic. Extrahop uses the term APM, but there is also an entire product category focused on this type of solution called Network Performance Monitoring (NPM).

Intricately co-founder and CEO Fima Leshinsky sees the future of APM in 2020 define as:

Performance

  • This is the smaller section of the APM market, and not really where the money lies. It’s focused on measuring the performance of applications: primarily in regards to web applications and load times.

Visibility 

  • The more significant part of the APM market is all about gaining visibility into application behavior. It has little to do with end-user performance, and everything to do with infrastructure monitoring and management for the complex and sophisticated backend of applications.

It’s important to note that the term, APM, has become somewhat of a “catch-all” for anything and everything performance-related. As competition increased and vendors from separate backgrounds started entering the industry, APM evolved into “a concept for managing application performance across many diverse computing platforms, rather than a single market.”

What Types of Companies Use APM?

Before we dive into the data, we must look at the components of a company that could benefit from an APM solution.

While you can say that any company with an application needs APM, Intricately prefers to focus on companies with a strong need and potential to buy or “Buyer Propensity,” which means businesses with significant cloud footprint, DevOps teams, and other unique attributes. Here are three components of a company with a need for APM:

1. Companies With Application And Developer Operations Teams

A business employing application and developer operations teams will find APM to be a crucial part of their entire DevOps life cycle. Without tracking application performance throughout the process, companies will get to the finish line with an app that is not performing well and doesn’t meet the expectations of end-users. “More and more companies are adopting this methodology to increase the pace of releases while still delivering quality applications with good user experiences.”

2. Companies That Consume Enterprise Infrastructure Such As AWS Solutions

As more companies shift toward serverless computing services, one goal has remained paramount: “The level of service delivered to end-users of applications must be maintained—or even improved—to meet ever-increasing customer expectations.”

So, even as companies choose to utilize cloud-based options like AWS, the end-user must not encounter any change in service. These companies need APM to ensure their cloud footprint is helping (and not actively hurting) their user experience.

3. Companies With Medium To Large Overall Cloud Spend

On the subject of cloud solutions, any company with medium to large overall cloud spend should be utilizing APM to take advantage of all the data available to their developer teams. If cloud solutions are a significant expenditure for the company, then APM tools will help ensure they have a solid grasp on their code performance, transaction times, application dependencies, and the end-user experience.

While the three components indicate a need for APM, in reality, any company that has any infrastructure has APM deployed in some form. 

Ultimately, it all comes down to application behavior. Every company has unique applications and, therefore, unique behaviors. APM’s job is to provide visibility into the behavior of your application, making it a critical tool for small startups to giant enterprises and everyone in between.

What’s next?

Be sure to read Chapter 2: How Large is the APM Market in 2020.

Over the course of the following weeks, we will release additional chapters with more data and analysis for the APM market. Subscribe to receive the next chapter in your inbox.

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