APM and observability are two related but distinct approaches to understanding and improving software performance. APM provides users with dashboards and alerts to troubleshoot application performance in production, focusing on known or expected system failures. Observability, on the other hand, is a holistic practice that involves collecting data across multiple layers of software architecture, analyzing it in real-time, and asking questions about that data to understand complex systems and discover unknown issues. While APM provides aggregated metrics, observability platforms give teams a connected, real-time view of their operational data in one place, enabling them to better understand system behavior and make iterative improvements to the entire stack. Observability encompasses multiple data types beyond just metrics, including logs, events, and traces, and aims to enhance the overall understanding of system behavior.