“No human wants to look at billions of traces”: Dynatrace bought Arize because agents need a new kind of observability

Observability software company Dynatrace has acquired Arize, a firm specializing in tracing, evaluating, and debugging AI agents and models, for a sum of $915 million. This acquisition is significant as it combines Dynatrace's existing visibility into applications and infrastructure with Arize's capabilities to address the unique challenges posed by AI agents.

Steve Tack, CPO and President of Dynatrace, explains that Dynatrace has been investing in AI to power observability for a long time, dating back to 2017 with the launch of Davis, its AI-powered digital assistant for performance monitoring. This investment has since expanded to include predictive and generative AI capabilities, as well as agentic AI like autonomous SRE agents designed to investigate and remediate incidents.

On the other hand, Arize has been focused on helping companies monitor and troubleshoot machine learning models in production. As AI agents and models have become more prevalent, Arize has extended its services to include tracing agent behavior, running evaluations, and identifying failures that traditional monitoring systems may miss.

The acquisition of Arize by Dynatrace aims to bring together these two aspects of observability, enabling the investigation of AI agent failures across both layers. This integration is crucial as the volume of data generated by modern applications continues to grow, and the need for comprehensive visibility into the entire AI application stack becomes more pressing. By combining their strengths, Dynatrace and Arize can provide teams with the tools they need to catch issues earlier and resolve them more efficiently.