Extended Detection And Response Market Size, Share & Trends Analysis Report By Component (Solutions, Services), By Deployment Type, By Application, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global extended detection and response market size was valued at USD 505.0 million in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 19.9% from 2021 to 2028. Extended detection and response (XDR) is a new term in security technology developed to respond to the need for sophisticated and comprehensive detection and response. Ongoing developments in technologies such as the Internet of Things (IoT) and the cloud have increased the risk of cyber threats, creating challenges in securing critical data. As a result, organizations are spending on several security solutions to strengthen their security and reduce redundant attacks.

The increased integration of several software solutions with existing systems and heightened complexities in managing multiple alerts with limited context about the increasing number of security threats cause security teams to lose visibility, hampering business operations. The scenario has led to the emergence of XDR technology, which uses dynamic analytics and machine learning techniques to provide extended visibility, analysis, and response across networks, clouds, and endpoints.

Over the years, the enhanced visibility and awareness of security threats offered by XDR solutions have led to their increased popularity in the U.S. By integrating XDR solutions, enterprise security analysts can eliminate and target cyber threats based on the severity at which they can impact the organization’s IT infrastructure. The rising popularity of XDR solutions has encouraged several cybersecurity vendors in the U.S. to introduce advanced EDR and XDR solutions. For instance, in February 2020, SentinelOne, a U.S.-based cybersecurity solution provider launched an AI-powered XDR solution that offers advanced threat detection and complete visibility across every endpoint device, physical or virtual, on-premise, or on the cloud.

The rising need for real-time monitoring and investigation of advanced threats is compelling organizations to adopt security solutions that extend the capabilities of threat detection from endpoints to multiple security control points such as cloud, servers, emails, and networks. This is driving the adoption of XDR tools that allow behavioral and telemetry analysis across several security layers, enabling security analysts to visualize a number of threats. Furthermore, the use of XDR tools reduces downtime on critical servers by offering tailored incident responses. These benefits are expected to drive market growth over the forecast period.

Increasingly complex regulatory compliance requirements, rapid migration to cloud computing, the shortage of technical security staff, and the unrelenting evolution of threats continue to increase security challenges for businesses. However, responding to the COVID-19 pandemic remained a major challenge for most security businesses across the world in 2020. The pandemic has refocused the attention of security staff on operational tools and cloud-delivered security tools that do not require a Local Area Network (LAN) connection to function, the need to migrate to cloud data centers and software as a service (SaaS) applications. This encouraged businesses to adopt XDR solutions to access policies and track threats across the cloud and business networks remotely.

Digitization and automation in security monitoring and threat detection gained prominence as organizations were pushed to adopt the remote working culture during the pandemic. With real-time security and workflow management capabilities, XDR solutions help security analysts significantly reduce the time spent on repetitive tasks, training, and providing support. In addition to the common management and workflow management activities, XDR solutions also help provide a large stream of alerts into smaller incidents with their severity level. These factors have contributed to the market growth during the pandemic.

Component Insights

By component, the Extended Detection and Response (XDR) market is segmented into solutions and services. The solutions segment dominated the market in 2020 and accounted for around 60% of the global revenue share. The need for a unified solution that can provide a holistic view of cyber threats across several control points, ranging from endpoints to networks and servers, has helped increase the adoption of XDR solutions. Moreover, the need to reduce the complexities associated with managing several security solutions and the alerts provided by such solutions have also contributed to the growth of the segment.

The services segment is expected to register the highest CAGR from 2021 to 2028. The evolving risks of cyber threats across organization’s security perimeters are driving the need for managed services. Managed XDR vendors assess the IT infrastructures of organizations in real-time and detect and mitigate advanced incidents. Furthermore, the rising demand for implementation and training services is driving the services segment.

Deployment Type Insights

By deployment type, the XDR market is segmented into cloud-based and on-premises. The on-premises segment accounted for around 55% of the global revenue share in 2020. Enterprises with the necessary IT infrastructure prefer the installation of XDR solutions on their premises as they have complete ownership of the solution and upgrades. Various large organizations and businesses that deal with critical business information select on-premise extended detection and response solutions as they provide an optimum level of data security and physical access controls.

The cloud-based segment has gained popularity owing to its cost benefits and flexibility. Additionally, the major market players are concentrating on launching cloud-based advanced threat management solutions to capitalize on the rising cloud solutions market. For instance, in October 2020, McAfee, LLC launched MVISION XDR, a proactive, data-aware, and open XDR cloud-based platform. Cloud-based extended detection and response solutions eliminate the need for the consumer to manage, upgrade, and buy the software.

Application Insights

The large enterprises segment dominated the market in 2020 and accounted for the lion’s share of the global revenue. Large organizations are at a bigger risk of cyber threats owing to the large number of employees processing sensitive business information and data on their workstations. Furthermore, the increasing trend of Bring Your Own Device (BYOD) among technology companies is intensifying the threat of cyber-attacks, driving the demand for XDR solutions.

The demand for XDR solutions and services across small and medium enterprises (SMEs) is expected to rise at a significant CAGR across the forecast period. With the increased adoption of mobile and web-based applications for business operations, SMEs are deploying XDR solutions to identify security gaps and mitigate cyber risks. SMEs are increasingly becoming aware of the benefits of threat detection and response systems. Moreover, the increasing number of large-scale start-ups is expected to drive the demand for XDR solutions and services over the forecast period.

Regional Insights

North America dominated the market in 2020 and accounted for nearly 50% of global revenue share. The U.S. and Canada are the leading markets for XDR solutions in the region, thanks to the increased investment in research & development activities to improve the existing cybersecurity techniques. The European market is also witnessing a significant increase in demand owing to the high demand for threat detection and response solutions from countries such as the U.K., Germany, and France.

The Asia Pacific XDR market is expected to be the most attractive regional market due to increasing technological innovations across Japan and China. Growing IT spending and an increasing number of data breaches are the key factors driving the regional market growth. According to the GSM Association, Asia Pacific is the largest IoT market in terms of the number of connections. Therefore, the demand for XDR solutions is expected to increase to protect data across organizations, be it on IoT devices, in the cloud, in email, or on-premises servers.

Key Companies & Market Share Insights

The key players that dominated the global XDR market in 2020 include McAfee, LLC, Trend Micro Incorporated., Microsoft, Palo Alto Networks, Cybereason, Broadcom, Cynet, and SentinelOne. These players are focusing on improving their market presence by implementing growth strategies such as new product development, collaborations, and mergers & acquisitions. These strategies are further helping market players to expand geographically and enter untapped markets.

For instance, In September 2020, Cynet launched Cynet 360 Version 4.0, the new generation autonomous breach prevention platform featuring extended detection and response. In June 2020, Atos SE announced an agreement to acquire Paladion to strengthen its global cybersecurity services. With their combined expertise, Atos SE and Paladion expect to bring their business knowledge assets and technology to build the XDR capability that end-user need as they are adopting multi-cloud and hybrid transformation strategies for their businesses. Some of the prominent players operating in the global extended detection and response (XDR)market are:

• McAfee, LLC

• Trend Micro Incorporated.

• Microsoft

• Palo Alto Networks.

• Cybereason

• Broadcom

• Cynet

• SentinelOne

Extended Detection And Response Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global extended detection and response market report based on component, deployment type, application, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2028)

  • Solutions

  • Services

• Deployment Type Outlook (Revenue, USD Million, 2017 - 2028)

  • On-premises

  • Cloud

• Application Outlook (Revenue, USD Million, 2017 - 2028)

  • Large Enterprises

  • SMEs

• Regional Outlook (Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa