If you''re standing up observability for a SaaS application, New Relic and Datadog are the two consolidated platforms most teams short-list. Both cover application performance monitoring, infrastructure metrics, logs, traces, and synthetics. The differences are pricing model, billing predictability, and the parts of the stack each does best.
## Pricing model
Datadog charges by host, by ingested log gigabyte, by indexed metric, and by user. New Relic charges by user and by ingested data gigabyte (with a free tier of 100 GB per month). Datadog''s per-host model gets expensive fast in container-heavy environments. New Relic''s per-gigabyte model penalizes verbose logs but rewards careful instrumentation. The blended cost is roughly comparable for medium-sized teams; outliers at either end (very small or very large) often see 2x to 3x cost differences depending on architecture.
## What Datadog does best
The infrastructure and Kubernetes layer. Datadog''s host-level integrations, network performance monitoring, and Kubernetes dashboards are widely considered best-in-class. If your engineering team spends most of its observability time inside the infrastructure layer (cluster health, network bottlenecks, hardware degradation), Datadog tends to feel more native.
## What New Relic does best
The application performance monitoring (APM) story, especially for teams writing in JVM, .NET, Ruby, and Go. New Relic''s APM agents have been refined over a decade and produce richer transaction traces with less configuration. The unified billing for one ingested gigabyte across logs, metrics, and traces makes capacity planning more predictable.
## Lock-in
Both platforms are heavily customized once they''re in. Custom dashboards, alerting rules, runbook integrations, and synthetic checks accumulate. Migrating between them takes 2 to 6 months for a mid-sized team, mostly spent recreating dashboards and alerts. If you adopt one, plan to stay for at least 3 years.
## How to decide
If your team is Kubernetes-native and infrastructure-heavy, Datadog. If your team is application-heavy with predictable usage and tight cost requirements, New Relic. For mixed environments, run a 30-day trial on each with the same workload and compare actual monthly cost against your projected production volume. Listed pricing on either platform is not what you''ll actually pay; both negotiate down 20 to 40 percent on multi-year commits.
## What''s not here
Open-source alternatives (Grafana Cloud, OpenTelemetry-based stacks, Prometheus plus Loki plus Tempo) are increasingly viable for cost-conscious teams. They require more in-house ownership but eliminate the per-gigabyte ingest cost entirely.
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Description
New Relic is a full-stack observability platform that provides APM, infrastructure monitoring, log management, and real-user monitoring. It uses a consumption-based pricing model with 100GB of free data ingest per month.
Datadog is a cloud-scale monitoring and analytics platform that provides full-stack observability for infrastructure, applications, logs, and security. It unifies metrics, traces, and logs in a single platform.
