In a time when budgets are tight but reliability still needs to be high, observability is under the spotlight. Monitoring and observability tools are some of the most expensive parts of a tech stack, often eating up the bulk of the budget. Luckily, there are strategies organizations can implement to reduce costs, such as utilizing open-source solutions like OpenTelemetry (OTEL), which provides a flexible, open standard for data collection without the price tag of proprietary tooling. It also allows you to pick your monitoring tool of choice. These two things combined mean you can collect and process more signals. 

But monitoring is only step one. PagerDuty makes a difference in the larger equation by flexibly integrating with any monitoring or observability tool to turn signals into automated responses, so teams can act fast when it matters most. Together, OTEL and PagerDuty offer a more efficient and scalable approach to observability: one that cuts costs, improves visibility, and automates incident response across the services that power your business.

Why OTEL should be on every business’ radar

If you’re running distributed systems, you know the challenges: monitoring, alerting, and troubleshooting aren’t just time-consuming, they’re resource-heavy and expensive. Many teams rely on a mix of tools like Datadog, Splunk, Grafana, Dynatrace, or New Relic, but those tools don’t always work well together. Data gets fragmented, workflows become disjointed, and operational costs climb.

OTEL helps solve these problems by offering a unified, open standard for collecting telemetry data, such as traces, metrics, and logs, from across your environment. That standard makes it easier to correlate data across tools, reduce manual work, and avoid being locked into a single vendor. And because it’s open source, you’re in control. Major vendors have already embraced OTEL, making it easier to plug into existing systems without adding unnecessary complexity or cost.

Paired with PagerDuty, that unified data doesn’t just improve visibility, it drives down operational costs. That’s because PagerDuty takes a vendor-agnostic approach to observability integrations. You’ll have the flexibility to integrate homegrown observability tools, use an open source solution, or a major observability vendor. Regardless of where the events come from, PagerDuty seamlessly integrates with that system and turns the ingested event data into automated action, reducing manual effort, speeding up resolution, and cutting the cost of every incident.

Planning for OTEL: What to consider

Like any observability approach, implementing OTEL starts with knowing what matters. What data do you actually need? Which metrics and logs will help you respond faster or prevent issues altogether? That clarity helps you collect the right data and avoid overpaying for storage or tooling you don’t need.

PagerDuty can help teams identify what telemetry is most valuable for incident response. By aligning your OTEL implementation with the systems and signals that are most important to your business, you can ensure you’re not just collecting data but putting it to work.

It’s also worth noting that OTEL has a learning curve, especially if you’re used to commercial tools. You’ll need a clear plan for handling data volumes—what gets stored, where, and for how long. Hot vs. cold storage strategies can help manage costs, especially as your data grows. But the tradeoff is worth it for many teams, especially as traditional observability platforms become more expensive.

Setting OTEL up for long-term success

To get the most out of OTEL, it helps to approach implementation with structure. Start by aligning with business priorities. Define what you want to monitor and why. Then set up the right sampling intervals, storage strategies, and scaling plans to support your architecture.

In practice, OTEL uses agents to collect data from endpoints and a centralized collector to process it. That setup can be as simple or as sophisticated as your use case requires. Ongoing maintenance is key, updating agents and making sure your system evolves with your software. Because OTEL is highly customizable, it helps to bring in guidance early on, especially if you’re integrating it with existing tools.

This is also where PagerDuty plays a critical role, but not as a telemetry destination. As you build your observability pipeline with OTEL, PagerDuty connects to the tools that consume that data, turning alerts, anomalies, and thresholds into real-time, automated action. That’s how you make observability not just visible, but operational, scalable, and responsive.

Pairing OTEL with PagerDuty for smarter incident response

Observability is only valuable if it drives outcomes. When issues impact revenue-generating systems, customer SLAs, or operational uptime, teams need to move fast and with confidence. PagerDuty picks up those signals from your monitoring or observability tool and detects incidents earlier using PagerDuty AIOps to reduce alert noise and orchestrate workflows for a more coordinated and automated incident response process, often resolving issues before they escalate.

OTEL delivers the data, and PagerDuty operationalizes it. This pairing gives organizations a scalable, cost-effective way to provide great customer experiences and improved business continuity without disrupting existing workflows.

Real-time operations need enriched data

The value of OTEL isn’t just in collecting data, it’s in what you can do with it. Take a revenue-generating application that’s running slightly slower than usual. Even small delays can have an impact. OTEL feeds rich telemetry into your observability tools, which surfaces the critical signals. PagerDuty then enriches those signals with context, spots patterns, and orchestrates the right response fast.

When paired with PagerDuty, that enriched data becomes even more powerful. You can trigger automated, orchestrated responses—diagnosing issues, referencing similar incidents, and activating virtual responders—before a human even needs to step in. That kind of proactive response keeps your systems running smoothly and your teams focused on higher-value work.

Automating responses at scale

One of the biggest advantages of combining OTEL and PagerDuty is the ability to automate more of your incident response. With the right data in place, you can build workflows that resolve common issues without human input. Senior engineers can create these workflows, and junior team members—or even bots—can execute them confidently.

Rather than adding yet another tool, this approach helps you get more out of the systems you already have. Whether you’re using Prometheus, Datadog, or something else, OTEL gives you the observability foundation, and PagerDuty helps you scale your response.

Maximizing value without creating future problems

It’s easy to assume that cutting observability costs means sacrificing quality. But with OTEL and PagerDuty, you don’t have to choose. You get the cost savings and the speed, visibility, and reliability your business depends on.

Investing in open standards and automation frees your team from repetitive tasks and lets them focus on higher-value work. And with PagerDuty, that automation becomes even more impactful, simplifying how you work with your existing tools, vendors, and workflows.

The payoff is immediate cost savings, long-term operational efficiency, and fewer surprises down the line.

Observability without the overhead

As observability costs rise, organizations must rethink their monitoring and response strategies. Leveraging open-source standards like OTEL alongside PagerDuty doesn’t just streamline observability, it transforms it. With integrated automation and event management, teams can turn observability from a cost burden into an opportunity for greater innovation and efficiency.

You don’t need to rip and replace what’s already working. You just need a more effective way to bridge the gap between monitoring and resolution. That’s where open standards and operational platforms like PagerDuty create real value by helping teams do more with the data they already have. To learn more about how PagerDuty operationalizes monitoring and observability data for more precise, automated incident response, check out our AIOps product tour.