Distributed tracing allows you to analyze latency issues in microservices applications. It works by collecting transaction data from each service call into trace trees with unique IDs. Zipkin is an open source distributed tracing system that uses this approach. It provides visualization of traces and spans to help identify latency bottlenecks and determine which microservice was responsible. Spring Cloud Sleuth is a tracer that can integrate services with Zipkin by adding trace IDs and span IDs to logs to correlate data.