OpenTelemetry vs New Relic - Which Monitoring Tool to Choose?

In today's complex software landscape, effective monitoring and observability are crucial for maintaining high-performance applications. Two prominent players in this field are OpenTelemetry and New Relic. But which one should you choose for your monitoring needs?

This article compares OpenTelemetry and New Relic, exploring their features, use cases, and potential limitations. We'll also introduce SigNoz as a modern alternative, helping you make an informed decision for your observability strategy.

What is OpenTelemetry and New Relic?

OpenTelemetry is an open-source observability framework designed to collect, process, and export telemetry data, including metrics, logs, and traces. It provides a standardized way of instrumenting applications and systems, allowing developers to easily monitor performance and troubleshoot issues across distributed systems. It integrates with various backends, ensuring flexibility for different environments.

On the other hand, New Relic is a commercial monitoring and observability platform offering comprehensive tools for monitoring application performance, infrastructure, and user experiences. It provides an all-in-one solution for real-time monitoring, performance analytics, and alerting, empowering teams to gain actionable insights and maintain system health.

Key Features of OpenTelemetry:

Cross-Language Support: OpenTelemetry supports multiple programming languages, including Java, Python, Go, and JavaScript, ensuring that applications built with various technologies can be instrumented seamlessly.
Extensibility: The framework allows users to add custom instrumentation and integrate it with other tools or systems, making it highly adaptable to unique monitoring needs.
Standardized Data Format: OpenTelemetry ensures that telemetry data is collected in a consistent format, promoting interoperability between different tools and platforms.
Vendor-Neutral: Being open-source, OpenTelemetry allows developers to choose their preferred backends for analysis, whether it’s Prometheus, Jaeger, or commercial platforms like New Relic or Datadog.
Distributed Tracing: OpenTelemetry supports tracing across microservices, enabling teams to track and visualize how requests flow through their systems.

New Relic’s Main Offerings:

Application Performance Monitoring (APM): New Relic’s APM offers deep insights into application performance, allowing teams to monitor response times, throughput, error rates, and more. For example, it can help pinpoint slow database queries or problematic API endpoints.
Infrastructure Monitoring: New Relic provides real-time visibility into the health of cloud services, virtual machines, and containers. It can monitor services like AWS EC2, Kubernetes clusters, and databases, offering detailed metrics and alerts for potential issues.
Logs and Events: New Relic consolidates logs from various sources into a centralized platform, making it easier to search, filter, and correlate logs with other telemetry data to troubleshoot and diagnose problems.
Synthetic Monitoring: New Relic offers synthetic monitoring to simulate user interactions with web applications. This helps teams proactively identify performance issues before they impact real users.
Alerts and Dashboards: New Relic allows users to set up custom alerts based on predefined thresholds and visualize system health through customizable dashboards, offering clear insights into performance metrics.

For example, OpenTelemetry can instrument a Node.js application running on AWS Lambda, capturing traces and sending them to a backend like Jaeger or Prometheus. On the other hand, New Relic can monitor the performance of the same application, with its APM offering helping track down latency bottlenecks and its infrastructure monitoring providing a view into the health of the AWS environment.

The Evolution of Monitoring Tools

Traditional monitoring approaches, primarily focused on infrastructure-level performance, began with basic tools like SNMP and log aggregators. These tools monitored hardware, networks, and servers. While effective for a time, they lacked the flexibility to handle complex, dynamic environments that emerged with the rise of cloud-native applications and microservices.

Cloud-native applications: With the shift to cloud computing, applications moved from monolithic structures to microservices. Each microservice operated independently, communicating through APIs and requiring real-time data for monitoring. This shift meant traditional monitoring tools couldn't scale effectively, as they were designed for static environments.
Microservices: As microservices increased, so did the complexity of monitoring. Developers now needed solutions to track hundreds or thousands of independent services running on different infrastructures. This led to adopting more distributed monitoring systems capable of handling the dynamic nature of microservices.
OpenTelemetry: The need for a standardized approach to observability became clear. OpenTelemetry emerged as a unified framework for collecting traces, metrics, and logs. It integrates with numerous tools, providing a consistent format for data across different services. This standardization simplified the implementation of observability, making it easier for teams to adopt and implement a comprehensive monitoring solution.
New Relic's Adaptation: New Relic, once focused on traditional application performance monitoring (APM), evolved its platform to cater to modern observability needs. By incorporating OpenTelemetry and expanding its toolset to handle distributed tracing, metrics, and logs, New Relic adapted to the cloud-native ecosystem. Its platform now provides full-stack observability, offering insights across the entire lifecycle of cloud-native applications and microservices.

Comparing OpenTelemetry and New Relic

OpenTelemetry and New Relic are popular solutions for observability and monitoring. Each offers unique features and capabilities. Understanding their differences can help you choose the right tool for specific use cases.

Data Collection Methods and Supported Telemetry Types
- OpenTelemetry: Supports a wide range of telemetry types, such as traces, metrics, and logs. It offers flexible data collection through SDKs and agents that can be integrated into applications to capture data from various environments.
- New Relic: Primarily focuses on APM, but also supports metrics, traces, and logs. It provides built-in instrumentation for a variety of programming languages and cloud environments.
OpenTelemetry allows fine-grained control over what data is collected and from where, which is beneficial for custom-built microservices, whereas New Relic’s APM automatically captures essential performance data with minimal configuration.
Instrumentation Approaches and Ease of Implementation
- OpenTelemetry: Open-source and highly customizable, OpenTelemetry requires more manual setup. Developers need to configure the SDKs, set up collectors, and manage data pipelines, which might be complex for beginners but offer flexibility in handling diverse monitoring needs.
- New Relic: Provides out-of-the-box integrations with minimal setup, making it ideal for quick deployments. The platform has pre-configured agents for different technologies and supports auto-instrumentation, reducing the need for manual configuration.
For a Java application, New Relic’s agent can be added with a single line of code, immediately starting to collect performance metrics. In contrast, OpenTelemetry requires setting up Java SDKs, configuring exporters, and integrating them with a backend for full observability.
Vendor Lock-In Considerations
- OpenTelemetry: Being open-source, it has no vendor lock-in. Data can be exported to any compatible backend like Prometheus, Jaeger, or commercial solutions, giving organizations the flexibility to switch observability platforms without changing the instrumentation code.
- New Relic: While New Relic offers a comprehensive solution, using it may result in vendor lock-in since the data is sent to New Relic’s cloud platform. Moving to a different vendor may require significant effort, especially if proprietary agents are heavily utilized.
With OpenTelemetry, if a company decides to switch from New Relic to another platform like Signoz, it can continue using the same instrumentation, and export data to the new platform without modifying the application code.
Pricing Models and Cost Implications
- OpenTelemetry: Open-source and free to use, but the cost arises from managing the infrastructure required for data collection, storage, and analysis. Organizations must set up and maintain own backends (e.g., Prometheus, Grafana), which incurs additional operational overhead.
- New Relic: Offers a subscription-based pricing model, typically based on the volume of data ingested, number of hosts, or the level of services required. While it provides a full-stack solution, the costs can increase with scale, especially for larger enterprises with high data volume.
For a small startup, OpenTelemetry could be a cost-effective solution if the team is comfortable setting up and managing their observability tools. On the other hand, New Relic’s pay-per-host model may be more suitable for teams seeking a fully managed observability platform but might become costly as the infrastructure grows.

Performance and Scalability

When evaluating observability tools for large-scale applications, performance and scalability are essential factors. OpenTelemetry and New Relic stand out in this domain for different reasons, each offering specific advantages depending on the use case.

OpenTelemetry offers a lightweight and distributed architecture, making it well-suited for cloud-native applications and microservices. Since it is vendor-agnostic, it integrates seamlessly with various backends, enabling flexibility in collecting and processing observability data. For instance, a company managing hundreds of microservices can implement OpenTelemetry to gather distributed tracing, metrics, and logs without adding significant overhead to the application’s performance. Its modular design allows users to tailor the instrumentation to suit the application’s needs, keeping resource consumption to a minimum.
New Relic, on the other hand, has a proven track record in handling large-scale deployments, particularly for monolithic or hybrid architectures. It provides a comprehensive suite of tools that monitor application performance, but also infrastructure, end-user interactions, and business metrics. With its auto-instrumentation features, setting up New Relic is faster, and it’s optimized for minimal performance impact, even in high-traffic environments. For example, e-commerce platforms that handle thousands of transactions per minute can rely on New Relic's robust monitoring to ensure that bottlenecks in the user experience are quickly identified and addressed.
When comparing the data processing capabilities, OpenTelemetry's distributed nature allows it to scale horizontally. This is ideal for highly dynamic and rapidly evolving systems, like those using Kubernetes. However, OpenTelemetry may require additional resources to process large volumes of telemetry data, which could introduce some complexity in managing backends like Jaeger or Prometheus. In contrast, New Relic centralizes much of the data processing within its infrastructure, offering built-in analytics that can process data efficiently at scale. This makes it an attractive choice for organizations looking for a more managed solution, especially when dealing with high volumes of real-time data.
The impact on application performance largely depends on how observability tools are implemented. OpenTelemetry's modular approach means developers can choose which data points to collect, reducing the likelihood of performance degradation. However, improper configuration could lead to overhead, especially in environments with limited resources. New Relic offers an out-of-the-box solution with optimized agents that have minimal impact on the application’s performance. Its auto-instrumentation ensures that data collection doesn’t interfere with critical paths, which is crucial for performance-sensitive applications.

Integration and Ecosystem

In the world of observability, integrating with existing tools and ecosystems is crucial. Both OpenTelemetry and New Relic offer distinct approaches to integration, each with its strengths.

OpenTelemetry's Vendor-Agnostic Approach: OpenTelemetry supports a wide range of technologies and vendors, providing flexibility for developers to choose the best solution for their specific needs. As a cloud-native observability framework, OpenTelemetry integrates seamlessly with many observability tools, such as Prometheus, Jaeger, and others. This vendor-neutral stance allows businesses to avoid vendor lock-in and maintain control over their monitoring infrastructure.
New Relic's Proprietary Ecosystem and Third-Party Integrations: Unlike OpenTelemetry, New Relic provides a proprietary ecosystem, which can simplify integration for those fully invested in its platform. New Relic also supports numerous third-party integrations, including cloud platforms like AWS, Azure, and GCP, as well as containerized environments like Kubernetes. This benefits teams already using New Relic, as it offers a unified view without needing to manage multiple tools.
Compatibility with Cloud Platforms and Containerized Environments: Both OpenTelemetry and New Relic work well with cloud platforms and containerized environments, but the setup and flexibility can vary. OpenTelemetry integrates with cloud-native technologies and platforms using standard protocols, making it suitable for microservices and distributed systems. New Relic, on the other hand, offers built-in integrations for popular cloud platforms and container orchestration systems, providing an out-of-the-box experience for users deploying applications on services like AWS or in Kubernetes clusters.
Community Support and Documentation Availability: OpenTelemetry benefits from robust community support due to its open-source nature. There are extensive guides, forums, and contributions from developers across the globe, making troubleshooting and learning much easier. In contrast, New Relic’s support is more structured through its own team, offering professional services and dedicated documentation. While this can provide faster solutions for New Relic users, OpenTelemetry’s community-driven approach fosters innovation and quick adaptation to emerging technologies.

Each tool offers distinct advantages when it comes to integrations and ecosystems. The choice depends on specific requirements, such as flexibility, cloud platform usage, and the acceptable level of vendor lock-in.

Use Cases and Best Practices

OpenTelemetry and New Relic are both powerful tools in the observability space, each excelling in different scenarios. Understanding when to use each, or even combining both, can lead to better insights and enhanced system performance. Below are the use cases, ideal scenarios, and best practices for implementation and data management.

OpenTelemetry excels in distributed tracing: When dealing with microservices and complex distributed systems, OpenTelemetry shines by capturing end-to-end traces of requests. It enables detailed tracing through various services, helping pinpoint the root cause of performance bottlenecks. For instance, in a microservices-based e-commerce platform, OpenTelemetry can trace a customer's journey from product selection to checkout, providing insights into slow service interactions.
Ideal use case for New Relic: New Relic is ideal for real-time application performance monitoring and full-stack visibility. It is well-suited for applications that require quick detection of anomalies, especially in production environments. For example, New Relic can be used to monitor a cloud-based SaaS application, providing metrics and monitoring response times, throughput, and error rates, ensuring that the system operates optimally at all times.
Hybrid approach combining OpenTelemetry and New Relic: A hybrid approach is effective for organizations needing both detailed telemetry data and high-level application insights. OpenTelemetry can be used for detailed distributed tracing and metric collection across services, while New Relic can be leveraged to analyze overall application health and manage alerts. For example, in a large-scale e-commerce system, OpenTelemetry could trace specific microservice interactions, while New Relic could monitor user experience metrics like page load times and server response times across the entire platform.
Best practices for implementation:
- Data consistency: Ensure consistency across monitoring tools by aligning naming conventions and tags. This enables smooth data correlation when using multiple observability tools.
- Data sampling: Both tools allow for sampling, which helps reduce overhead. To avoid excessive data collection, set an appropriate sampling rate based on the criticality of the transactions.
- Unified dashboard: Create a unified dashboard integrating both OpenTelemetry and New Relic data to get a comprehensive view of system performance. This helps in correlating tracing information with application metrics in a single pane of glass.
- Alert management: Use New Relic for higher-level alerts based on performance thresholds, while OpenTelemetry can provide deeper insights into the root causes. Set up alerts to notify teams when certain thresholds are breached and combine logs with traces for faster troubleshooting.

Challenges and Limitations in Observability Tools

Observability tools, like OpenTelemetry and New Relic, offer numerous benefits for monitoring and tracing system performance. However, several challenges and limitations may arise during implementation and ongoing use.

Learning Curve and Complexity of OpenTelemetry: OpenTelemetry is a robust framework that requires significant expertise to be set up and managed effectively. It involves multiple components like tracing, metrics, and logs, each with its own configuration. For example, setting up a tracing pipeline in a microservices architecture could involve configuring multiple exporters and ensuring compatibility with various backends. Teams may need to invest considerable time in understanding the nuances of each component to ensure the correct flow of data and effective monitoring.
Potential Limitations of New Relic's Proprietary Nature: New Relic, as a proprietary observability tool, can introduce limitations around customization and flexibility. For instance, a team might face difficulty in tailoring monitoring metrics to match specific business needs if the predefined configurations do not align. The proprietary nature also means that integration with other third-party tools may be restricted, potentially leading to vendor lock-in. Organizations relying on New Relic may also be limited in how much data can be exported or analyzed, depending on the licensing terms.
Data Retention and Compliance Considerations: Many observability platforms store vast amounts of system telemetry, which raises concerns about data retention policies and compliance regulations such as GDPR or HIPAA. For instance, if sensitive user data is inadvertently captured by a monitoring tool, ensuring its secure storage and timely deletion becomes crucial. Failure to comply with these regulations can result in heavy penalties or legal repercussions. Teams must carefully evaluate data retention policies, and implement necessary safeguards to avoid compliance violations.
Overcoming Integration Challenges in Legacy Systems: Integrating modern observability tools with legacy systems often presents significant hurdles. Legacy systems might use outdated technologies that are incompatible with current observability solutions. For example, integrating OpenTelemetry into a monolithic system built with older programming languages or frameworks can be complex and time-consuming. Custom instrumentation may be required to bridge the gap, requiring developers to spend additional time on integration efforts rather than focusing on core business features.

Future Trends in Observability

The observability landscape continues to evolve rapidly. OpenTelemetry is expected to see further adoption and feature enhancements, potentially becoming the de facto standard for telemetry data collection.

New Relic is likely to focus on enhancing its AI and machine learning capabilities, providing more advanced analytics and automated insights. The company may also expand its support for emerging technologies and observability use cases.

We may see a convergence of open-source and commercial solutions, with increased interoperability and standardization across the industry. This trend could benefit users by providing more choices and flexibility in their observability strategies.

SigNoz: A Modern Alternative

SigNoz presents itself as a compelling alternative in the observability space. As an open-source, full-stack observability tool, SigNoz combines the benefits of OpenTelemetry with the comprehensive features typically found in commercial solutions like New Relic.

Key features of SigNoz include:

Native support for OpenTelemetry
Full-stack observability (metrics, traces, and logs)
Custom dashboards and alerts
Cost-effective, self-hosted solution

Compared to OpenTelemetry, SigNoz provides a more complete out-of-the-box solution, reducing the need for additional backend setup. In contrast to New Relic, SigNoz offers similar capabilities without the potential for vendor lock-in or unpredictable costs.

SigNoz cloud is the easiest way to run SigNoz. Sign up for a free account and get 30 days of unlimited access to all features.

You can also install and self-host SigNoz yourself since it is open-source. With 19,000+ GitHub stars, open-source SigNoz is loved by developers. Find the instructions to self-host SigNoz.

Key Takeaways

OpenTelemetry offers standardization and flexibility, while New Relic provides a comprehensive, managed solution.
Your choice depends on specific needs: customization vs. out-of-the-box functionality.
Consider factors like scalability, integration capabilities, and long-term costs.
Emerging alternatives like SigNoz combine open-source benefits with full-stack observability.

FAQs

Can OpenTelemetry and New Relic be used together?

Yes, OpenTelemetry and New Relic can be used together. OpenTelemetry can serve as the data collection layer, while New Relic acts as the backend for analysis and visualization. This approach combines OpenTelemetry's flexibility with New Relic's powerful analytics capabilities.

What are the main differences in pricing between OpenTelemetry and New Relic?

OpenTelemetry is open-source and free to use, but you'll need to factor in costs for infrastructure, storage, and maintenance. New Relic uses a subscription-based model with pricing tiers based on data ingestion and retention. For large-scale deployments, New Relic can become costly, while OpenTelemetry's costs are more directly tied to your infrastructure choices.

How does the learning curve compare between OpenTelemetry and New Relic?

OpenTelemetry generally has a steeper learning curve due to its flexibility and the need for more configuration. It requires a deeper understanding of observability concepts and potential backend options. New Relic, with its managed service approach and guided setup, typically offers a gentler learning curve for teams new to advanced observability practices.

Are there any performance impacts when using OpenTelemetry vs. New Relic?

Both OpenTelemetry and New Relic are designed to have a minimal performance impact on your applications. However, the impact can vary based on implementation details, instrumentation choices, and data volume. OpenTelemetry's lightweight nature can lead to lower overhead in some cases, while New Relic's optimized agents are designed for efficiency. In both cases, proper configuration and sampling techniques can help manage any potential performance impacts.