HFS Highlight: ServiceNow acquires Lightstep to manage the new complexity of cloud-native applications

ServiceNow has announced it has signed an agreement to acquire observability provider Lightstep for an undisclosed amount.

The acquisition follows hot on the heels of IBM’s moves to take over Instana and Turbonomic with the intent to progress toward full-stack observability. Observability is not yet robustly defined across the industry. Simply put it is the evolution and extension of enterprise monitoring, with an increased focus on full-stack understanding and closed-loop remediation of underlying reliability issues, often by a DevOps engineer or SRE (Site Reliability Engineer).

The acceleration in M&A activity highlights two issues. First, the AIOps space, in which observability falls is immensely disparate and thus consolidation is long overdue. Second, clients need the right toolsets to manage the new complexity of cloud-native applications. For ServiceNow, the ambition is not only about building out AIOps solutions but also about bringing the benefits of observability to new roles across the enterprise by expanding the capabilities of the Now platform.

Lightstep’s focus on cloud-native apps targets capabilities on next-gen applications

Implicit in the term “observability” is that traditional approaches to IT management and operations get extended to the complexity of cloud-native applications. Lightstep is one of the poster children of observability with its core team honing its skills at Google. Its capabilities include:

• Distributed tracing. Distributed tracing refers to the process of following a request as it moves between multiple services within a microservices architecture. Lightstep provides teams with information about full-system correlations, dynamic service maps, and mobile-to-backend visibility as well as the context they need to resolve complex issues in minutes.
• It collects and analyzes data across infrastructure, application, runtime, cloud, and other third-party services. The goal is to correlate root causes across traces, metrics, and logs anywhere in the system, and provide immediate insights for developers and SREs (Site Reliability Engineering).
• Change Intelligence. Lightstep automatically detects changes to applications, infrastructure, and user experience and surfaces the exact causes. With its “Change Intelligence” capability, engineers can investigate complex issues in minutes.
• OpenTelemetry leadership. Lightstep is one of the co-creators of the OpenTelemetry open-source project, a vital part of nearly every enterprise’s move to cloud-native technology and particularly cloud-native observability. Leadership in OpenTelemetry is helpful from a branding standpoint, but more importantly, helps feed the needs of ServiceNow’s market back into the OpenTelemetry priorities and roadmap.

ServiceNow brings speed and cost benefits of AIOps and observability to the enterprise

With the Lightstep acquisition, ServiceNow is doubling down on blending more AIOps capabilities across its offerings. In its Quebec release in March 2021, ServiceNow has introduced “ITOM (IT Operations Management) Predictive AIOps” leveraging the acquisition of Loom Systems in 2020 and combining it with existing ML correlation capabilities. These capabilities predict issues before they become problems and help organizations automate resolutions. This allowed ServiceNow to apply AI to their knowledge base of issues and fixes for better insights into root causes and allows them to automate remediation tasks, which also reduces the number of Level 1 IT incidents. At the same time, Lightstep links telemetry data such as events, logs, and tracing with operational metrics such as SLAs within cloud-native distributed applications. Combining Lightstep’s observability with ServiceNow’s AIOps and workflows will enable teams to take actions. Thus, the ultimate outcome is better experiences from modern applications, while maintaining effective control of the cost of running operations.

Beyond the core platform, the acquisition is likely to expand ServiceNow’s Enterprise DevOps Platform which aims at applying automated governance principles to DevOps projects. The capabilities include:

• An automated change management engine that maintains appropriate governance
• Push-button audits that use real-time pipeline data to provide instant reporting
• Pipeline visualization features that aggregate data from the entire DevOps toolchain for insight into project status and traceability

The Bottom line: ServiceNow will continue tuck-in acquisitions to offer deeper integration of its capabilities and thus ultimately a better user experience

Just like the acquisition of Intellibot didn’t herald the entry into the RPA market for ServiceNow, Lightstep won’t lead to a foray into traditional monitoring and AIOps tools. In our view, the acquisition is a good strategic fit for ServiceNow. The strategic intent is rather to offer a deeper integration of its capabilities that will lead to an enhanced user experience. Lightstep will bring more effective management tools for the new complexity of cloud-native applications. The desired outcome is to enable managing that complexity across organizational silos. Fundamentally, with its slew of acquisitions, ServiceNow is investing to help customers manage an ever-increasing technology stack and an ever-expanding operational process landscape. From a buy-side lens, ServiceNow adds AI muscle to boost remediation, governance, and DevOps. Thus, the user experience gets further enhanced and will ultimately lead to cost reduction.