Are observability costs eating up too much of your IT budget? For many enterprises using Splunk, the answer is yes. A 600 GB/day license for Splunk can cost enterprises more than one million dollars per year. For the majority of enterprises dealing with log volumes of at least a terabyte per day, the cost of Splunk is simply too high. The result isn’t just a hit to the budget. These costs also block businesses from investing in other innovations like AI software.
Many businesses have seen an increase in IT budgets in 2025, with Gartner predicting a 10% increase in global IT spending this year. Unfortunately, this increase in spending isn’t going towards innovation. Instead, it’s being offset by increases in the cost of existing software. At a time when executives must invest in the next generation of AI systems, they’re paying more for legacy tools. Instead of building a competitive edge, IT leaders and the C-suite are struggling to balance budgets, all while keeping a close eye on an environment of economic uncertainty. It’s a tough topic to bring up in the board room: higher IT budgets just to maintain the status quo, with innovation stifled.
The natural inclination is to look at cost centers that aren’t directly driving revenue. But observability and cybersecurity are absolutely mission-critical, and enterprises are finding it challenging to migrate off Splunk despite its high costs. Full-scale migrations are both costly and risky, and Splunk is popular with the teams that use it, leading to the risk of friction and lower team morale.
To reduce costs, it’s common to filter, sample, or otherwise discard data. This is a large part of why Cribl, a telemetry processing engine, has become so successful. Cribl Stream allows teams to intelligently filter and sample data before it’s sent to Splunk. Yet while discarding data leads to lower Splunk bills, it comes with other costs: gaps in data, potential compliance and security headaches, and stress for the teams that need to choose which data to discard and which to keep.
To make matters worse, teams using Cribl are discovering that it, too, leads to high costs, especially when enterprises are generating terabytes of data every day. The cost to process data in Cribl Stream is $.32/GB, not including infrastructure costs, and you don’t even get to keep it. It’s already painful to pay too much to keep data. Now you have to pay too much to throw data away.
Fortunately, there is a new approach that can dramatically reduce the cost of Splunk without needing to sample, filter, or otherwise discard your data. This approach, known as tiered observability, is focused on reducing the cost of observability. And with the right integration, teams can use Splunk to analyze that data.
Tiered Observability: The Best Approach for Reducing Splunk Bills
The goal of tiered observability is to reduce the high costs associated with premium observability solutions. Data is divided into multiple tiers, typically gold, silver, and bronze. Just 10% (or less) of an organization’s most valuable data is kept in the gold tier (Splunk). The rest is kept in more cost-effective log analytics solutions (silver tier) and data lakes (bronze tier). By sending most of data to more affordable solutions, enterprises can drastically reduce their Splunk bills, typically by 50% or more, without throwing any of it away.
The other piece of the puzzle is to avoid fragmented tooling and siloed data. That’s why it’s important to choose a log analytics solution that offers an integration with Splunk that’s easy to set up. The goal is to use Splunk as a front end, complete with dashboards and queries, so that your teams can continue to use their preferred workflows. Meanwhile, on the back end, a cost-effective log analytics solution should be able to handle high-volume data ingestion, provide real-time analytics, and offer the option for long-term data retention without gaps in visibility.
With the right solution, only two tiers are necessary: Splunk (gold) and a log analytics solution (silver/bronze). You get tremendous cost savings, and by integrating the two tiers, you avoid fragmentation and siloed data.
Combining Splunk and Hydrolix to Reduce Costs
Hydrolix offers a cost-effective solution for log analytics, and it’s built for the scale of data that many enterprises are dealing with today. Hydrolix is designed for log volumes of at least one terabyte per day, with Hydrolix Cloud available for smaller log volumes as well (one terabyte per month or more).
Enterprises typically save 6x or more on data that’s kept in Hydrolix instead of Splunk. And with the Hydrolix Connector for Splunk, teams can analyze and visualize all of their Hydrolix data directly in Splunk.
The following image shows how a Splunk user can search a Hydrolix table that holds high-volume data, in this case critical SIEM security data.
In addition to being much more cost-effective than Splunk, Hydrolix provides long-term data retention. This means that enterprises can retain data as long as they need to, with 15 months being the default retention period. All data is “hot” for immediate querying, making Hydrolix a good choice when teams need to quickly access historical data. Long-term hot data retention is useful for cybersecurity (forensic analysis and threat hunting), compliance (especially when records may need to be retrieved quickly), and use cases based on long-term seasonality.
Making a Smooth Transition: No Stressful Migration Needed
With a managed trial, also known as a proof of concept (PoC), enterprises can quickly get started with Hydrolix, all without any initial cost overhead or risk of losing data. Here ‘s what a typical process looks like for a smooth transition to tiered observability that combines Splunk and Hydrolix.
- Start with a few high-volume data sources to test in Hydrolix. This can be silver or bronze tier data, or any data source that you would like to keep for a longer period of time than is currently affordable in Splunk. It can even be a high-volume data source that you traditionally haven’t been able to analyze due to its scale and cost (such as CDN logs).
- Stream data into both Splunk and Hydrolix. If you’re concerned about the potential of data disruptions, you can stream log data into both solutions during the course of the managed trial. Since the managed trial is free, the cost of duplicate data is minimal (compute and storage if you’re ingesting the data into your own cloud infrastructure).
- Analyze Hydrolix data in Splunk. Using the Hydrolix Connector for Splunk, your teams can analyze and visualize Hydrolix data in Splunk, ensuring that their existing workflows aren’t disrupted.
- Discontinue Splunk log streams to reduce Splunk bill. By the end of the managed trial (typically a month), you’ll have a full month’s worth of data in Hydrolix. If you’re satisfied with Hydrolix, you can discontinue the redundant Splunk streams and immediately start reducing your Splunk bill.
- Audit remaining log sources and identify candidates for switching over to Hydrolix. You can then determine which remaining log sources would be most impactful to switch over to Hydrolix and gradually change over, decreasing your Splunk bill over time. Faster migrations are also possible for motivated businesses.
- Bonus: Make your Hydrolix log data available for other use cases like data science, business intelligence, and AI development. When enterprises are able to keep their log data for longer, they often discover new use cases for it beyond observability and cybersecurity, especially when that log data is made available across the organization. The Hydrolix Connector for Apache Spark makes it possible for enterprises to work with their data in analytical tools like Databricks. This is also an opportunity to build toward AI-readiness, since AI models typically benefit from large, full-fidelity datasets that exhibit a full range of seasonality.
Slim Your IT Budget and Make Room for More Innovation
If your IT budget is increasing, that should be an opportunity for innovation, not just higher bills from SaaS providers. And if your budget is flat or decreasing, increased costs for mission-critical services like observability will lead to gaps elsewhere, such as in your data, your teams, and other tooling your teams rely on. By using tiered observability to combine Hydrolix and Splunk, you can proactively cut costs, avoid unnecessary sacrifices in terms of your data, and drive innovation and AI readiness. Considering that the typical Splunk bill for many enterprises is thousands, or even tens of thousands, of dollars every day, waiting even a few months to get started can prove costly. With a managed trial, you get a low-risk opportunity to test out a rare win-win: keep more of your data longer while paying much less for it.
Next Steps
- Check out our infographic on reducing Splunk costs.
- Using or considering Cribl to reduce Splunk costs? Compare Cribl and Hydrolix and see how Hydrolix can give you greater cost savings without sacrificing the fidelity of your data.
- See use cases for analyzing Hydrolix data in Splunk, complete with dashboard visualizations.
- Learn more about Hydrolix Search for Splunk.
- Book a demo or managed trial to get started with Hydrolix.
