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Observability

What Is OpenTelemetry How It Works Benefits and Use Cases

Unpacking the open-source standard for observability and how to use it effectively
by Netdata Team · June 9, 2025

If you manage modern applications, you’re dealing with complexity. Your system isn’t a single program running on one server; it’s a distributed web of microservices, serverless functions, and third-party APIs running across a hybrid cloud infrastructure. Understanding what’s happening inside this complex system is a monumental challenge. Each component and vendor has its own proprietary way of exporting performance data, leaving you to juggle dozens of agents and formats, leading to data silos and vendor lock-in.

This is the exact problem OpenTelemetry (OTel) was created to solve. OpenTelemetry is an open-source observability framework and toolkit designed to create a single, vendor-neutral standard for instrumenting, generating, and exporting telemetry data. By adopting the OpenTelemetry standard, you can gain deep insights into your system’s behavior without being tied to a specific monitoring vendor, paving the way for true, unified observability.

What is Telemetry Data? The Three Pillars of Observability

Before diving into how OpenTelemetry works, it’s essential to understand the data it handles. OTel observability is built on three core types of telemetry data, often called the “three pillars of observability.”

Traces

Traces record the end-to-end journey of a single request as it moves through all the services in your distributed system. Each step in the journey, like an API call or a database query, is a “span.” By stitching these spans together, a trace gives you a complete, contextualized view of a request’s lifecycle, making it invaluable for pinpointing bottlenecks and debugging errors in a microservices architecture.

Metrics

Metrics are numerical measurements aggregated over a period. They provide a high-level overview of your system’s health and performance. Think of metrics like CPU utilization, memory usage, request count, or error rate. They are efficient to store and process, making them ideal for dashboards and alerting on known conditions.

Logs

Logs are timestamped text records of specific events that occurred within a service. They can be structured (like a JSON object) or unstructured. While traces tell you where a problem happened and metrics tell you when, logs often tell you why. They provide the granular, detailed context needed for deep-dive troubleshooting and root cause analysis.

How Does OpenTelemetry Work? A Look at the Components

It’s a common misconception that OpenTelemetry is a monitoring platform you can install and use. Instead, what OpenTelemetry is is a specification and a collection of tools designed to standardize the collection and exporting of data. It is not an OpenTelemetry backend itself; it needs a destination to send the data for storage, visualization, and analysis.

The architecture of OTel Telemetry consists of several key components that work together.

APIs and SDKs

The process starts with instrumenting your code. The OpenTelemetry APIs provide a standard set of interfaces for developers to capture telemetry data from their applications, regardless of the programming language. The Software Development Kits (SDKs) are the language-specific implementations of these APIs. The SDKs handle the configuration, data processing (like sampling traces), and exporting the collected data.

The OpenTelemetry Collector

The OpenTelemetry Collector is a powerful and flexible component that acts as a vendor-agnostic proxy. You don’t have to send data directly from your application to a backend. Instead, you can send it to the Collector, which can receive, process, and export telemetry data to one or more destinations. This decouples your application from your observability backend, giving you immense flexibility.

The Collector itself has three main parts:

  • Receivers: They get data into the Collector. A receiver can pull data from a source or accept pushed data. It understands various formats, including the native OpenTelemetry Protocol (OTLP), as well as other popular formats like Jaeger or Prometheus.
  • Processors: These run on data between receiving and exporting. You can use processors to filter sensitive data, add metadata, batch data to reduce network overhead, or make sampling decisions.
  • Exporters: They send the processed data to one or more backends. You can have an exporter for Prometheus, another for Jaeger, and a third for a commercial observability platform, all running simultaneously.

The Collector can be deployed as an OpenTelemetry agent on the same host as your application (as a sidecar or daemonset) or as a standalone service that aggregates data from many sources.

The Key Benefits of Adopting the OpenTelemetry Standard

The momentum behind OpenTelemetry is immense. As the second most active project in the Cloud Native Computing Foundation (CNCF) after Kubernetes, it’s rapidly becoming the industry default for instrumentation. Here’s why so many organizations are embracing it.

Freedom from Vendor Lock-in

This is arguably the most significant benefit of OpenTelemetry. By instrumenting your code with the OTel APIs and using the Collector, you are no longer tied to a specific vendor’s proprietary agent. If you decide to switch your observability backend, you don’t need to re-instrument your applications. You simply change the exporter configuration in your Collector. This gives you the power to choose the best tools for the job without facing a massive migration project.

Standardized and Unified Instrumentation

Before OTel, developers had to learn different libraries and methods to instrument applications for different monitoring tools. OpenTelemetry provides a single, consistent set of APIs and conventions across multiple programming languages. This simplifies the development process, reduces the learning curve for new team members, and ensures that telemetry data is consistent and correlated across your entire stack.

Future-Proof and Community-Driven

Because OpenTelemetry is an open-source, community-driven project with backing from all major cloud providers and observability vendors, you can be confident in its longevity. The standard is constantly evolving to meet the needs of modern applications, ensuring your investment in instrumentation remains relevant for years to come.

Common OpenTelemetry Use Cases

So, what is OpenTelemetry used for in practice? Here are a few common scenarios where OTel shines.

  • Distributed Tracing in Microservices: This is the flagship use case. By tracing requests as they hop from one service to another, developers can visually identify which service is causing a slowdown or returning an error, dramatically reducing the mean time to resolution (MTTR).
  • Holistic Application Performance Monitoring (APM): By combining metrics, traces, and logs, you can get a complete picture of your application’s health. You can see a spike in a latency metric on a dashboard, drill down into the traces for that period to find the slow requests, and then examine the logs for the specific service instance to find the root cause.
  • Resource and Cost Attribution: In a shared infrastructure, it can be difficult to know which team or feature is consuming the most resources. Traces can be enriched with attributes like customer_id or team_name, allowing you to slice and dice performance data and attribute costs accurately.

Netdata: The Ideal Backend for Your OpenTelemetry Data

OpenTelemetry brilliantly solves the problem of data collection, but it leaves an important question unanswered: where do you send the data? You need a powerful OpenTelemetry monitoring platform to store, query, visualize, and alert on your metrics, traces, and logs.

This is where Netdata excels as an OpenTelemetry backend. While OTel provides the standardized data, Netdata brings it to life with unparalleled real-time visibility.

Netdata is designed to be the perfect complement to an OpenTelemetry strategy. It includes a native OTLP receiver, allowing you to seamlessly send your application telemetry from the OpenTelemetry Collector directly to Netdata. But the real power comes from combining OTel’s application data with Netdata’s comprehensive, zero-configuration infrastructure monitoring.

While you use OTel to instrument your custom application code, the Netdata Agent automatically discovers and monitors everything else in your stack—from the operating system and containers to services like databases and message queues. This gives you complete, correlated, full-stack observability in one place. Imagine seeing a trace from your OTel-instrumented application that shows high database latency, and right on the same dashboard, seeing a real-time chart from the Netdata Agent showing a spike in disk I/O on that database server. That’s the power of combining OTel with Netdata.

A New Standard for a Complex World

The shift to distributed architectures demanded a new approach to observability. OpenTelemetry provides that approach by creating a common language for telemetry data that frees you from vendor lock-in and simplifies instrumentation. It empowers you to own and control your data.

By combining the open-source telemetry standard of OpenTelemetry with a powerful, real-time observability platform like Netdata, you can unlock a complete, correlated view of your entire system, from the underlying infrastructure to your application code.

Ready to see your OpenTelemetry data in high-resolution, real-time dashboards? Get started with Netdata for free today and unify your infrastructure and application monitoring.