Extended Detection and Response Market Size - By Offering (Solutions, Services), By Deployment Mode (On-premises, Cloud), By Organization Size (Large Enterprises, SMEs), Industry Vertical & Global Forecast 2023 - 2032

Extended Detection and Response Market Size - By Offering (Solutions, Services), By Deployment Mode (On-premises, Cloud), By Organization Size (Large Enterprises, SMEs), Industry Vertical & Global Forecast 2023 - 2032

Extended Detection and Response Market Size

Extended Detection and Response Market size was valued at USD 1.4 billion in 2022 and is estimated to register at a CAGR of 19% between 2023 and 2032. Extended detection and response is a security technology that meets an organization’s demand for sophisticated & comprehensive threat detection & response. The growing risk of cyber threats is attributed to the continuous advancements in technologies such as the cloud and the Internet of Things (IoT). These risks are propelling the demand for solutions that can secure critical data. Owing to these factors, companies are investing in security solutions to prevent attacks and strength the security of the firm.

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The increased integration of multiple software solutions into the existing systems and growing complexities in managing multiple security threats with limited context are reducing the visibility of security teams, thereby disrupting business operations. This factor has encouraged the development of XDR technology, which employs Machine Learning (ML) and dynamic analytics to provide extended visibility, response, and analysis across clouds, networks & endpoints.

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XDR is a cybersecurity model that combines multiple security technologies & tools into an integrated platform to provide comprehensive threat detection, response, and remediation capabilities. XDR integrates data from various security sources, thereby offering increased capabilities compared to traditional Endpoint Detection and Response (EDR) solutions. XDR is designed to provide organizations with a universal view of their security posture by collecting and correlating data from multiple security solutions such as network traffic analysis, endpoint protection, log management, and cloud security platforms. This aggregated data is then analyzed using advanced analytics, machine learning, and threat intelligence to identify & prioritize potential threats and security incidents.

Implementing an XDR solution can be complex as it requires integration with the existing security infrastructure and various data sources. It may involve consolidating data from multiple security tools and platforms, which can be challenging and time-consuming. Ensuring seamless integration and interoperability across different systems and technologies can pose a hurdle for organizations.

Furthermore, these solutions incur significant financial investments and ongoing operational costs. The deployment, maintenance, and management of XDR platforms can be resource-intensive, necessitating skilled cybersecurity personnel and dedicated infrastructure. Smaller organizations with limited budgets and resources may face difficulties in adopting and maintaining XDR market.

COVID-19 Impact

In 2020, the COVID-19 pandemic posed a significant challenge to most security businesses around the world. The pandemic shifted the attention of various firms to operational tools and cloud-delivered security tools that can operate without a LAN connection as well as highlight the need to migrate to cloud data centers & Software-as-a-Service (SaaS) applications. This prompted the implementation of XDR solutions to remotely access policies and track threats across the cloud & business networks.

The stay-at-home measures implemented during the pandemic forced organizations to adopt the remote working model, fueling the importance of digitization and automation in security monitoring & threat detection. With real-time security and workflow management capabilities, XDR solutions enable security analysts to spend less time on repetitive training, tasks, and support. They also provide alerts whenever incidents occur along with their severity level, in addition to common management and workflow management activities.

Extended Detection and Response Market Trends

The growing need for real-time monitoring and investigation of advanced threats is compelling organizations to implement security solutions that extend threat detection capabilities beyond endpoints to multiple security control points such as emails, servers, the cloud, and networks. This is encouraging the use of XDR tools that enable behavioral and telemetry analysis across multiple security layers. These tools enable security analysts to visualize various threats. Furthermore, XDR tools reduce the downtime of critical servers by providing customized incident responses.

Extended Detection and Response Market Analysis

Based on offering, the extended detection and response market is divided into solutions and services. The need for a unified solution that can provide a comprehensive view of cyber threats across multiple control points, ranging from endpoints to networks and servers, has contributed to the increased adoption of XDR solutions. Furthermore, the complexities associated with managing multiple security solutions and the alerts provided by such solutions have created a need for these solutions, further contributing to segment growth.

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Based on the deployment mode, the extended detection and response market is categorized into on-premises and cloud. Enterprises with mandatory IT infrastructure prefer to install extended detection and response solutions on their premises as they can own the upgrades and solutions completely. Moreover, on-premises XDR solutions are preferred by many large enterprises and organizations that deal with critical business information owing to the highest level of data security and physical access controls these solutions provide.

Based on organization size, the extended detection and response market is bifurcated into large enterprises and SMEs. A large number of employees process sensitive business information and data on their workstations, large organizations are more vulnerable to cyber threats. Furthermore, the growing trend of Bring Your Own Device (BYOD) among technology companies is heightening the threat of cyberattacks, fueling the demand for XDR solutions.

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The BFSI segment accounted for 25% of the extended detection and response market share in 2022. The BFSI industry faces increased cybersecurity threats as it handles sensitive data regarding financial transactions and customer information. Cyberattacks such as data breaches, ransomware, and phishing attempts are prevalent. XDR solutions provide advanced threat detection & response capabilities, enabling BFSI organizations to detect and mitigate cyber threats more effectively, minimizing potential financial losses and reputational damage.

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North America extended detection and response market held over 40% revenue share in 2022 and is set to cross USD 3 billion by 2032. The region experiences a high volume of cyber threats including data breaches, ransomware attacks, and advanced persistent threats. As organizations strive to enhance their cybersecurity measures, they are inclining toward XDR solutions to procure comprehensive threat detection, response, and remediation capabilities.

North America has stringent data privacy and compliance regulations such as the Health Insurance Portability and Accountability Act (HIPAA) and the California Consumer Privacy Act (CCPA). Organizations in the healthcare, finance, and government industries must adhere to these regulations and implement robust security measures. XDR solutions help them meet these requirements by providing advanced threat detection, incident response, and compliance reporting capabilities.

Extended Detection and Response Market Share

Some major companies operating in the extended detection and response market are

• Barracuda Networks
• Bitdefender
• Cybereason
• Cynet
• Blueshift
• CrowdStrike
• eSentire
• Palo Alto Networks
• Qualys

These players are focused on strategic partnerships, new product launches, and commercialization efforts for market expansion. They are heavily investing in research to introduce innovative products and garner the maximum market revenue.

Extended Detection and Response Industry News

• In October 2022, Secureworks, Inc. released Taegis, an extended detection and response platform. It includes Taegis ManagedXDR and Taegis XDR, which enable Japanese enterprises to improve their cybersecurity solutions and reduce cyber risks.
   
• In March 2022, Microsoft Corporation acquired Nuance Communications Inc., a company based in Massachusetts that specializes in artificial intelligence. The acquisition enabled Microsoft Corporation to provide security-focused, vertically optimized AI- & cloud-based solutions.

This extended detection and response (XDR) market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments

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Market, By Offering

• Solutions
• Services

Market, By Deployment Mode

• On-premises
• Cloud

Market, By Organization Size

• Large enterprises
• SMEs

Market, By Industry Vertical

• BFSI
• Government
• Manufacturing
• Retail & e-commerce
• Energy & utilities
• Others

The above information has been provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa

Frequently Asked Questions (FAQ)

How big is the extended detection and response market?

The market size of extended detection and response was reached USD 1.4 billion in 2022 and is set to record over 19% CAGR from 2023 to 2032, due to the rising risk of cyber threats and the continuous advancements in technologies, including the cloud and the Internet of Things (IoT).

What is the value of the North America XDR industry?

North America held over 40% of the market share in 2022 and will exceed USD 3 billion in 2032, owing to the rising volume of cyber threats, such as data breaches, ransomware attacks, and advanced persistent threats.

How is the demand for extended detection and response driven across the BFSI sector?

The BFSI industry vertical segment held over 25% of the XDR market share in 2022 and is estimated to expand by 2032, owing to the rising number of data breaches, ransomware, and phishing attempts.

Who are the key extended detection and response market players?

Some leading extended detection and response companies include Barracuda Networks, Bitdefender, Cybereason, Cynet, Blueshift, CrowdStrike, eSentire, Palo Alto Networks, and Qualys.