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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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In today's complex digital landscape, application monitoring has become mission-critical for businesses of all sizes. As engineering and DevOps leaders evaluate observability platforms, two names consistently emerge at the forefront: New Relic and Datadog. While both offer robust monitoring capabilities, their pricing models differ significantly—and these differences can have substantial impacts on your bottom line.
This comprehensive comparison breaks down the pricing structures of both platforms to help you make an informed decision that aligns with your technical requirements and budget constraints.
The Evolving Landscape of APM Pricing
Both New Relic and Datadog have undergone significant pricing model changes in recent years, moving away from traditional agent-based licensing toward consumption-based models. This shift reflects broader industry trends in monitoring SaaS costs, but the implementations vary considerably between vendors.
New Relic Pricing: The All-In-One Consumption Model
New Relic revolutionized its pricing strategy in 2020 by introducing a consumption-based model centered around the "New Relic One" platform. Their current pricing structure includes:
Data Ingest Model
- Pricing basis: Pay per GB of data ingested
- Starting cost: $0.30 per GB for the standard tier
- Free tier: 100GB free data per month
- Commitment options: Discounted rates for annual commitments
User-Based Charges
- Full Platform Users: $99/month per user for complete platform access
- Basic Users: Free for limited dashboard viewing
According to New Relic's documentation, customers typically save 40-60% compared to their previous pricing model when switching to this consumption-based approach.
Key Advantage: Predictability
New Relic's primary advantage lies in its all-inclusive approach. Once data is ingested, you can use all platform features without additional costs for specific monitoring types (unlike Datadog's feature-based approach).
Datadog Pricing: Feature-Based Subscription Model
Datadog employs a more modular pricing approach where you pay for specific monitoring features:
Core APM Pricing
- APM base: $31 per host per month (billed annually)
- Infrastructure monitoring: $15 per host per month
- Log management: Starting at $0.10 per GB ingested
Additional Feature Costs
- Real User Monitoring (RUM): $1.50 per 10,000 sessions
- Synthetic monitoring: $5.00 per 10,000 test runs
- Database monitoring: Additional per-host charges
- Free tier: Up to 5 hosts with limited retention
According to a 2022 Forrester study commissioned by Datadog, organizations using their platform reported an ROI of 437% over three years—suggesting that despite the à la carte pricing, the value proposition remains strong for many enterprises.
Making Direct Comparisons: APM Pricing Scenarios
To illustrate the practical differences in monitoring SaaS costs between these platforms, let's examine some typical deployment scenarios:
Small Startup Scenario (15 hosts, moderate data volume)
- New Relic: Approximately $500/month (2 full users + 500GB data)
- Datadog: Approximately $700/month (15 hosts with APM + infrastructure)
Mid-Market Company (100 hosts, higher observability needs)
- New Relic: $3,000-4,500/month (10 full users + 5TB data)
- Datadog: $4,600-6,000/month (100 hosts with multiple monitoring types)
Enterprise Deployment (500+ hosts, comprehensive monitoring)
Both vendors offer custom enterprise pricing with significant discounts at this scale, but the fundamental model differences persist:
- New Relic: Scales primarily with data volume and user count
- Datadog: Scales primarily with host count and feature activation
Hidden Cost Factors in Observability Platform Pricing
Beyond the advertised rates, several factors can significantly impact your total monitoring expenditure:
Data Volume Growth
For New Relic customers, unexpected spikes in telemetry data can lead to surprising bills. According to industry analysts, organizations typically see 30-50% year-over-year growth in monitoring data volume.
Feature Adoption
Datadog's model can become considerably more expensive as teams adopt additional monitoring capabilities. What might start as basic infrastructure monitoring often expands to include logs, APM, synthetic tests, and more—each adding to the total cost.
Retention Policies
Both platforms charge premiums for extended data retention. Default retention periods are:
- New Relic: 8 days for transaction traces, 395 days for metrics
- Datadog: 15 days for APM traces, 15 months for metrics
Strategic Considerations Beyond Pure Cost
While monitoring SaaS costs are important, several other factors should influence your decision:
Integration Ecosystem
- Datadog: Generally offers a broader range of out-of-the-box integrations
- New Relic: Provides deep integrations with fewer platforms but offers OpenTelemetry support
Technical Overhead
The simplicity of New Relic's all-in-one pricing comes with unified administration, while Datadog's modular approach may require more complex deployment planning.
Long-Term Cost Predictability
With New Relic, costs scale with data growth. With Datadog, costs scale with infrastructure growth and feature adoption. Your organization's specific growth patterns should inform which model aligns better with your future.
Optimizing Your APM Investment
Regardless of which platform you choose, several strategies can help optimize your observability spending:
- Implement data sampling to reduce volume while maintaining visibility
- Create custom metrics instead of storing all raw data
- Regularly review and adjust data retention policies
- Establish governance around which services merit comprehensive monitoring
Conclusion: Finding Your Monitoring Match
The ideal choice between New Relic and Datadog pricing models depends on your specific monitoring needs and organizational patterns:
Choose New Relic if you prefer predictable per-GB pricing, want all features included, or have relatively stable host counts with variable data needs.
Choose Datadog if you want to pay precisely for the features you use, have stable and predictable data volumes, or need specific advanced monitoring capabilities.
Both platforms offer free trials and proof-of-concept opportunities—taking advantage of these to evaluate real-world costs in your environment is the most reliable way to make an informed decision about your observability investment.
Remember that while pricing is important, the value delivered through improved performance, reduced downtime, and enhanced customer experience should remain the primary consideration when selecting your observability platform.