AWS Lambda extensions offer a streamlined integration of third-party tools, such as Datadog, with Lambda environments, facilitating the execution of custom code and monitoring tasks alongside functions. This collaboration allows users to collect and forward function logs, enhanced metrics, and traces directly to Datadog, complementing existing CloudWatch metrics and logs from other AWS services. The Datadog Lambda extension, available as a Lambda Layer or Docker dependency for Node.js and Python runtimes, simplifies monitoring by eliminating the need for additional infrastructure and data storage costs. Enhanced metrics, such as cost estimates and memory usage, are displayed in real-time on Datadog's platform, providing insights into function performance and identifying issues like high memory utilization. Tools like AWS SAM and Serverless Framework, along with Datadog's CloudFormation macro and Serverless plugin, further ease the installation process, making it simpler to collect and send telemetry data without added complexity.