The European observability stack: Grafana Labs, Coralogix EU, and the Datadog renewal question

The renewal conversation that keeps surfacing

A pattern in European mid-market engineering organisations through 2025 was that the Datadog renewal conversation kept landing on the CTO's desk. The licence had grown to a six-figure or seven-figure annual cost. The product was excellent. The architectural lock-in was real. The renewal team had no leverage in the conversation. The CTO was asked, repeatedly, whether there was a credible alternative.

The honest answer through 2023 was that the credible alternatives were narrower than the marketing of the alternatives suggested. New Relic had its own commercial problems. The open-source observability stack required engineering investment most mid-market teams could not justify. The European-headquartered alternatives were smaller, less feature-complete, and less integrated into the broader CI/CD and incident response tooling the engineering team had built around Datadog.

What changed through 2024 and 2025 was that two alternatives matured into serious competitors for European mid-market accounts. Grafana Labs, the British-incorporated company that has been building an open-source observability stack for over a decade, reached commercial maturity with Grafana Cloud and a meaningful European customer base. Coralogix, the Israeli-Tel Aviv founded company with a strong European go-to-market and a Dublin data centre, made its commercial pitch on cost-per-event economics that were substantially cheaper than Datadog for high-volume log workloads.

What each company actually does

Grafana Labs built around the LGTM stack: Loki for logs, Grafana for visualisation, Tempo for traces, and Mimir for metrics. The open-source posture gives the European mid-market a procurement-friendly story. The hosted Grafana Cloud product gives the same teams a path to managed deployment without the engineering investment in self-hosting. The 2024 acquisition of Pyroscope added continuous profiling. The 2025 release of Grafana Asserts added the LLM-driven incident analysis features that compete with Datadog Watchdog. The product is now broad enough that an engineering organisation can run on Grafana Cloud for the same set of observability use cases that previously required Datadog.

Coralogix took a different positioning bet. The product's strongest selling point is the Streama architecture that processes log events without indexing them, which produces materially lower storage and query costs for high-volume logging. For an engineering organisation generating fifty or one hundred terabytes of logs per month, the cost differential against Datadog is not marginal. The Dublin data centre gives European customers the data residency story Datadog has had to work harder to defend.

Sentry, the open-source error tracking and performance monitoring company with a hybrid US-and-European footprint, occupies the application-monitoring slice of the same procurement conversation. The 2024 release of Sentry's session replay product and the 2025 expansion into AI-powered issue analysis put Sentry in competition with both Datadog APM and the application-tier features of Grafana Cloud. The European mid-market accounts that have moved from Datadog APM to Sentry plus open-source profiling have reported the migration was less work than they expected and the cost savings were substantial.