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How to Calculate Log Analytics ROI

Calculating the ROI of your log analytics solution is often complicated. For many teams, this technology can be a cost center. Depending on your platform, the cost of log analysis can quickly add up. For example, many organizations use solutions like the ELK stack because the initial startup costs are low. Yet, over time, costs can creep up for many reasons, including the volume of data ingested per day, required retention periods, and the associated personnel needed to manage the deployment.


How to Calculate Log Analytics ROI


Instead of viewing log management as a cost center, it’s more valuable to look at its business value and impact on your bottom line. Calculating log analytics ROI involves two main steps:

  • Determining the value of log analytics to your organization
  • Figuring out the total cost of ownership (TCO) of your log analytics solution

DOWNLOAD: Estimate the TCO to Build and Operate an ELK Stack

Luckily, there are options for log analytics solutions that can both lower costs and provide a clearer path to ROI. Let’s learn more.


The business case for log analysis

Log data contains insights that your organization needs to run more effectively and securely. By analyzing log data, you can get details about the entire IT environment in real time, or at any point in time in history.

For example, server logs can be used to monitor the health and security status of the IT landscape, because they contain details on:

  • Machine and network traffic
  • User access
  • Changes to applications and services
  • And countless other indicators.

Using this information, organizations can meet a variety of business objectives. Here’s how.


Leveraging valuable insights from trends in your log files

There are many unique use cases for log data. For example, most teams use log analytics for security and compliance purposes. Using the same tools for IT and security operations can save organizations time and money. Perhaps more importantly, log analysis can reduce the risk of a security breach.

Using this technology, organizations can identify potential security threats faster. By integrating log analytics with a security information and events management (SIEM) system, DevSecOps teams can act quickly on alerts and identify the root cause of malicious activity within their infrastructure and applications.

What’s more, many compliance regulations, such as SOC 2, PCI, and GDPR, require that you retain your logs for a set period of time. For this reason, using a cost-efficient log analysis tool can lower the cost of long-term long retention and help you meet compliance requirements.

Many organizations also use log analytics to troubleshoot cloud infrastructure and IT issues. This data can reveal critical insights on recurring patterns in your cloud environment, which you can leverage to optimize cloud performance, security, and more. Often, detecting ongoing cloud issues requires more than in-the-moment data available via monitoring and observability platforms. Beyond cloud infrastructure, a log analytics platform can help CloudOps teams monitor everything – including apps, servers, load balancers and devices.

READ: The Definitive Guide to Log Analytics, 2021

Finally, business users can query log data to make smarter business decisions. Using common business intelligence (BI) tools such as Tableau or Looker, any user on the team can leverage analytics to influence key business decisions – such as prioritizing product pipelines, improving the customer experience, and more.


Log Analytics Usage and Estimated Costs


Mapping business benefits to cost centers

Some of these benefits above can be mapped to clear cost centers. In many cases, the cost of inaction is clear. For example, according to The Ponemon Institute, the cost of a security incident in 2021 rose to $4.24 million – the highest average cost in 17 years. With the variety and number of security incidents increasing, it’s likely this number will continue to rise.

In addition, depending on your industry, the cost of non-compliance can be severe. Violations to widely applicable data protection laws like GDPR can cost organizations hundreds of thousands to millions of dollars.

Beyond security and compliance, unchecked cloud costs can add up. Many of these costs are due to solvable problems that can be identified with the right log analytics solution. During the pandemic in particular, many organizations scaled their cloud consumption, with little to no insight into how this added scale impacts their bottom line.


Log Analytics ROI: Hidden Benefits

Some other business benefits of log analysis are less tangible. For example, unlocking insights from log analytics via BI can help teams:

  • Ship software and respond to issues faster
  • Identify additional revenue opportunities
  • Get improved product intelligence
  • Identify reasons for churn in the customer experience

Making these important business improvements can make a real difference to your organization’s bottom line.


How to Estimate Costs for a Log Analytics Solution

Now that we’ve covered some of the key business benefits, it’s time to look at how to calculate the TCO of log analytics. To do that, consider how the following aspects of log monitoring and retention will impact your monthly cost. Here are some key questions to ask:

  • Data retention: How many days do you need to retain logs to meet compliance or business requirements, before moving these logs to cold storage?
  • Ingestion rate: How much raw data will you need to ingest per day?
  • Overhead: How will your storage capacity account for sudden spikes in data ingestion, due to unexpected events such as legitimate user demands or unauthorized activity?

From there, you should consider the cost of inaction (see the cost centers identified above) within your TCO calculation. In other words, how much will not having a log analytics solution cost you?

Beyond the hard numbers, be sure to map the intangible benefits – including the potential to drive bottom line revenue by discovering previously unidentified insights. One other aspect to think about is how log analytics can complement existing observability investments, such as a security information and event management (SIEM) platform or an application performance monitoring (APM) tool.

If you are using a costly log analytics solution, such as the ELK stack, it might be time to consider a more cost-efficient alternative. A true TCO analysis of your ELK stack must include the cost of administration and maintenance, as well as difficult trade-offs for data retention. Fortunately, the unique ChaosSearch architecture and technologies consume far fewer resources than a comparable ELK stack,  providing cost savings of up to 80%.

Use our interactive calculator to calculate the TCO of your current stack, and see how ChaosSearch stacks up.

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Additional Resources

About the Author, George Hamilton

As the director of product marketing, George leads product positioning, messaging, and go-to-market strategy for new and existing ChaosSeach offerings. Prior to ChaosSearch, George led product marketing for CloudHealth by VMware’s cloud management platform. George has also worked at several Boston-area startups, led product marketing for Dell EMC’s object storage, and was an industry analyst focused on cloud computing and IT management software. More posts by George Hamilton