Transitioning to Open-Source Observability: A Cost-Benefit Analysis and Migration Framework

Abstract

Commercial observability platforms cost enterprises $1.5–2.5 million annually at 1TB daily telemetry, motivating evaluation of open-source alternatives. This paper assesses migrating to an open-source stack—Prometheus (metrics), Loki (logs), and Jaeger (traces)—through a case study of an 800GB/day cloud-native deployment. The migration achieved 68% cost reduction ($1.26M first-year savings) with 14–24% query latency increase. Break-even analysis places the cost-advantage threshold at 50–100GB daily ingestion. We present a nine-month phased migration framework covering infrastructure sizing, query translation, and parallel validation. Critical success factors include structured logging practices, dedicated platform engineering resources, and comprehensive training (45 hours per engineer). The framework suits Kubernetes-native organizations with mature DevOps capabilities. Limitations: Findings derive from a single organization with favorable preconditions; cost data is self-reported; alternative technology stacks are not evaluated. Organizations should assess applicability to their specific contexts.