As companies pursue digital transformation, cloud services like AWS Lambda are essential for modernizing application architectures, and Dynatrace enhances this process by providing tools for comprehensive observability. The complexity of applications using numerous microservices necessitates end-to-end observability for optimal performance and root-cause analysis. Dynatrace offers Lambda Layers to facilitate distributed tracing and capture metrics and logs from Amazon CloudWatch, providing a unified view with AI-powered analysis. The new AWS Lambda Telemetry API simplifies the observability pipeline by integrating logs, traces, and metrics into a single interface, reducing operational complexity and total cost of ownership. This enhancement allows for improved insights into AWS Lambda's execution lifecycle, better monitoring policy enforcement, lower cloud monitoring costs, and seamless integration for users. The API extension, developed with input from Dynatrace, enables more efficient telemetry signal capture and supports large-scale monitoring while enhancing the speed and accuracy of alerting on metric anomalies.