Snowflake is in talks to acquire Observe for about $1 billion. If the deal happens, it would be Snowflake’s largest acquisition so far, following several smaller buys in 2025. The move would take Snowflake directly into the observability market, where it would compete more openly with companies like Datadog, Dynatrace, and Splunk, now owned by Cisco.Observe builds tools that help developers and IT teams monitor systems and investigate incidents. One important detail is that Observe already runs on Snowflake’s data platform. That existing relationship matters. It suggests a more natural fit than a typical acquisition and reduces the friction customers often face when two products are stitched together after a deal.The talks also line up with Snowflake’s recent M&A strategy. Over the past year, the company has been adding pieces that support AI development, data pipelines, and model oversight. This puts it on a similar path as Databricks, with both vendors trying to become the main platform enterprises rely on to build and operate AI agents using their own internal data.At the same time, observability is getting crowded and increasingly folded into larger platforms. Many standalone tools are being absorbed by companies rooted in security or data management. Palo Alto Networks’ acquisition of Chronosphere is a recent example. Against that backdrop, a Snowflake–Observe deal would signal that observability is becoming less about isolated monitoring tools and more about owning the data and context behind how systems behave.
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