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Expert GuideUpdated February 2026

Best Application Monitoring Tools

See inside your applications before users tell you something's broken

By · Updated

TL;DR

Datadog is the modern observability leader with best-in-class UX and broad coverage. New Relic offers strong APM with generous free tier for cost-conscious teams. Sentry is essential for error tracking regardless of other tools. For infrastructure-heavy workloads, consider Prometheus + Grafana as an open-source option.

Modern applications are complex distributed systems. When something goes wrong, you need more than server metrics—you need to trace requests across services, understand application behavior, and catch errors before users complain. The observability market has consolidated around a few major platforms, but costs can spiral quickly. Here's how to get visibility without overspending.

What is Application Monitoring?

Application monitoring (APM) provides visibility into how your applications perform—response times, error rates, throughput, and traces through distributed systems. Modern observability extends this with infrastructure metrics, log aggregation, and real user monitoring. The goal: understand application health and quickly identify issues when things go wrong.

Why Application Monitoring Matters

You can't fix what you can't see. Without monitoring, you discover problems from user complaints—the worst way to learn. Good APM catches issues early, helps you understand performance trends, and significantly reduces time to resolution. For production systems, it's not optional—it's insurance that pays for itself with every incident avoided.

Key Features to Look For

Distributed TracingEssential

Follow requests across microservices to identify bottlenecks

Error TrackingEssential

Capture, aggregate, and alert on application errors with context

Metrics & DashboardsEssential

Visualize application and infrastructure health

AlertingEssential

Get notified when things go wrong, with smart noise reduction

Log Management

Centralize and search application logs

Real User Monitoring

See actual user experience in browsers and apps

Infrastructure Monitoring

Track servers, containers, cloud resources

AI/ML Analysis

Anomaly detection and intelligent alerting

Key Factors to Consider

What do you need to monitor? APM vs. infrastructure vs. logs—scope matters for cost
Language and framework support—ensure your stack is well-covered
Pricing model: per-host, per-GB, per-trace—understand what drives your bill
Data retention needs—logs and traces are expensive to store long-term
Integration with your deployment and incident management tools

Evaluation Checklist

Install the agent on a staging server — measure overhead: CPU usage increase should be under 3%, latency impact under 5ms
Trigger a known error and trace it end-to-end — can you identify the root cause in under 5 minutes from alert to stack trace?
Set up 3 alerts (error rate, latency p99, CPU) — verify they fire within 2 minutes and don't create false positives
Check your projected monthly cost: calculate hosts × price + estimated log/trace volume × per-GB rate — compare to budget
Verify language/framework support — check that your specific stack (Next.js, Django, Go, etc.) has a well-maintained agent

Pricing Overview

Free/Starter

Sentry Developer (free, 5K errors), New Relic Free (100GB/mo), Grafana Cloud Free (10K metrics)

$0
Professional

Datadog Infrastructure $15/host + APM $31/host, New Relic Standard $0.35/GB above 100GB

$15-$31/host/month
Enterprise

Datadog Enterprise $23/host (infra) + custom APM, Dynatrace ~$69/host — full-stack observability

$23-$75+/host/month

Top Picks

Based on features, user feedback, and value for money.

Teams wanting comprehensive, unified observability with the best UX in the market

+Best-in-class UX
+750+ integrations
+Unified platform: metrics, traces, logs, RUM, security, and CI visibility in one place
Costs escalate fast: 20 hosts with APM + Logs = $920/mo minimum (before log volume)
Complex pricing

Cost-conscious teams wanting strong APM with predictable, usage-based pricing

+100GB/month free forever
+Simple pricing: all features included, pay only for data above 100GB at $0.35/GB
+Strong APM heritage
UI is functional but less polished than Datadog
100GB sounds generous but logs from 10+ hosts can exceed it quickly; monitor usage

Every development team that wants to catch and fix application errors before users notice

+Best-in-class error tracking
+Developer experience is excellent
+Team plan at $26/mo for 50K errors is affordable
Focused on errors and performance, not full infrastructure monitoring
Performance monitoring (Tracing) is newer and less mature than dedicated APM tools

Mistakes to Avoid

  • ×

    Sending all logs to Datadog — at $0.10/GB ingestion, a verbose 20-host cluster can generate $500+/month in log costs alone; sample or filter logs aggressively

  • ×

    Monitoring without alerting — dashboards without alerts are just decoration; set up PagerDuty/OpsGenie integration with escalation policies from day 1

  • ×

    Paying for full APM when you only need error tracking — Sentry Team at $26/mo covers error tracking for most teams; don't buy Datadog APM ($31/host) just for errors

  • ×

    Ignoring Prometheus + Grafana — free, open source, and handles infrastructure metrics at any scale; pair with Sentry for errors and you have 80% of Datadog for 90% less

  • ×

    Not monitoring your monitoring costs — set budget alerts in Datadog/New Relic; a misconfigured agent or log pipeline can generate thousands in unexpected charges

Expert Tips

  • Start with Sentry (free) + New Relic (free 100GB) — this covers error tracking and APM for $0/month; add Datadog only when you need 750+ integrations or superior UX

  • Sample traces in production — capturing 100% of traces is wasteful; 10-20% sampling catches anomalies while reducing costs by 80-90%

  • Set meaningful alerts with runbooks — every alert should include: what's broken, who's responsible, and how to fix it; alerts without context create panic, not resolution

  • Consider the Prometheus + Grafana + Sentry stack — Prometheus for metrics (free), Grafana for dashboards (free), Sentry for errors ($26/mo); total cost ~$26/mo vs. $500+/mo for Datadog

  • Monitor your monitoring bill — set a monthly budget alert at 80% of target; log volume spikes from a chatty service or bad deploy are the #1 cause of surprise charges

Red Flags to Watch For

  • !Per-host + per-GB pricing that scales unpredictably — Datadog Infrastructure ($15/host) + APM ($31/host) + Logs ($0.10/GB) can exceed $200/host/month at scale
  • !No free tier or limited trial period — New Relic's 100GB/mo free forever sets the benchmark; tools without a free tier are harder to evaluate
  • !Alerting limited to basic thresholds — you need anomaly detection, composite conditions, and intelligent noise reduction to avoid alert fatigue
  • !Vendor lock-in on proprietary query languages — tools that use standard PromQL, SQL, or OpenTelemetry are easier to migrate from

The Bottom Line

Sentry (free to $26/mo) is essential for error tracking — install it regardless of other tools. New Relic (free 100GB/mo) offers the best entry point for full APM with predictable pricing. Datadog ($15-31/host/mo) has the best UX and integration coverage but costs escalate fast. For budget-conscious teams, Prometheus + Grafana + Sentry provides 80% of Datadog's value for 90% less.

Frequently Asked Questions

Do I need both APM and error tracking?

APM includes basic error tracking, but dedicated error trackers like Sentry provide much better error management—grouping, assignment, release tracking. Many teams use both: APM for performance visibility, Sentry for error workflows.

How much does application monitoring really cost?

It varies wildly—from free tiers to hundreds of thousands per year at scale. Key cost drivers: number of hosts, data volume (especially logs), retention period, and features enabled. Start small and understand your usage patterns.

Should I use open-source monitoring tools?

Prometheus + Grafana is excellent for metrics and dashboards, especially at scale. But operational overhead is real—you're running the monitoring infrastructure. Managed services cost more but let you focus on your product.

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