Extended Detection and Response (XDR) Market Size - By Offering (Solution, Services), By Deployment Mode (On-premises, Cloud), By Organization Size (Large Enterprises, SME), By End-use & Forecast, 2024 - 2032

Extended Detection and Response Market Size

Extended Detection and Response (XDR) Market size was valued at USD 1.7 billion in 2023 and is estimated to register at a CAGR of over 19% between 2024 and 2032. The growing risk of cyber threats is attributed to the continuous advancements in technology propelling market growth. The rapid evolution of technology, including the proliferation of Internet of Things (IoT) devices and the increasing digital transformation, has created a more complex and vulnerable attack surface. These advancements offer new opportunities for innovation and introduce novel vulnerabilities and attack vectors. To prevent cyberattacks and strengthen security, companies are launching new solutions in the market.
 

For instance, in August 2024, Vectra AI announced the expansion of its XDR platform, enhancing real-time visibility for Security Operations Center (SOC) teams through its patented Attack Signal Intelligence. This upgrade provides a comprehensive view of vulnerabilities across networks, identities, clouds, and GenAI tools, thus helping SOC teams proactively identify and address security gaps, including identity hygiene issues and network risks.
 

Moreover, the growing adoption of cloud technologies is significantly driving the extended detection and response XDR market growth. As organizations increasingly migrate to cloud environments and adopt hybrid cloud strategies, they face new security challenges due to the distributed nature of cloud infrastructures. XDR solutions enhance cloud security by providing integrated visibility and threat detection across both on-premises and cloud environments. To launch advanced solutions in the market, major players focus on partnership and collaboration activities with other players in the ecosystem.
 

For instance, in May 2024, Tata Consultancy Services (TCS) and CrowdStrike announced a strategic partnership to enhance TCS’s extended detection and response (XDR) services using CrowdStrike’s Falcon XDR platform. This collaboration aims to provide unified protection through AI-powered cloud security and next-gen SIEM, addressing the increasing velocity and sophistication of cyberattacks. XDR solution offers real-time monitoring and response capabilities that are crucial for managing and securing cloud-based assets, driving the XDR market demand.
 

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 solutions, thus hindering market growth.
 

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. This encourages the use of XDR tools that enable behavioral and telemetry analysis across multiple security layers. These tools enable security analysts to visualize various threats. To gain business capabilities market players are launching new solutions.
 

For instance, in June 2024, Kivu Consulting launched the new CyberCertainty Managed Extended Detection and Response (XDR). This advanced solution combines Kivu’s extensive threat expertise with cutting-edge technology to deliver agile protection and rapid detection across various attack vectors including endpoint, network, identity, and cloud. XDR tools reduce the downtime of critical servers by providing customized incident responses. These advantages are expected to foster the extended detection and response industry growth over the forecast period.
 

Extended Detection and Response Market Analysis

Based on offering, the market is divided into solutions and services. The solution segment led the market with around USD 1.2 billion market revenue in 2023. Increasing regulatory compliance requirements are driving the growth of XDR solutions. As data protection regulations such as GDPR, CCPA, and HIPAA become more stringent, organizations must enhance their cybersecurity measures to ensure compliance.
 

XDR solutions help meet these regulatory demands by providing comprehensive threat detection, incident response, and detailed reporting capabilities. It enables organizations to monitor and protect sensitive data across various IT environments, facilitating adherence to compliance standards. By offering advanced security features and centralized control, XDR solutions assist organizations in avoiding costly penalties and maintaining regulatory compliance, fueling market growth.
 

Based on industry vertical, the extended detection and response market is categorized into BFSI, government, IT & Telecom, manufacturing, healthcare, retail & e-commerce, and others. The BFSI segment held around USD 340 million in 2023. The financial industry faces increased cybersecurity threats as it handles sensitive data regarding financial transactions and customer information. Extended detection and response solutions offer advanced threat detection and response capabilities that are required for protecting against these threats.
 

XDR integrates data from various security layers such as endpoints, networks, and cloud environments providing a unified view of potential threats. This comprehensive approach enables BFSI organizations to detect and respond to cyber threats with accuracy and speed, significantly reducing the risk of financial losses and reputational damage.
 

North America led the global extended detection and response market with a major share of over 30% in 2023. 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 across several 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.
 

As European organizations rapidly adopt digital technologies such as cloud computing, IoT, and remote work solutions they create more complex IT environments that are difficult to secure with traditional methods. XDR solutions offer a combined approach to security by integrating data from diverse sources and providing comprehensive visibility across digital assets. This enables organizations to detect and respond to threats more effectively in an increasingly digital landscape. As businesses continue their digital transformation process, the demand for XDR solutions to safeguard these advanced infrastructures is growing rapidly.
 

Government initiatives and investments in cybersecurity are driving the growth of the extended detection and response market in Asia-Pacific. Governments in the region are increasingly recognizing the need for cybersecurity and are investing in national security strategies, policies, and infrastructure. These efforts often include funding for advanced security technologies such XDR solutions to protect critical infrastructure and improve national cyber resilience. By supporting public-private partnerships and encouraging the use of advanced security measures, government support boosts the market as organizations aim to meet regulatory requirements and benefit from government-supported cybersecurity improvements.
 

Extended Detection and Response Market Share

Crowdstrike and Palo Alto dominate the market with around 10% market share in 2023. CrowdStrike integrates artificial intelligence (AI) and machine learning (ML) into its XDR platform to enhance threat detection, automated response, and predictive analytics. It further leverages its cloud-native architecture to offer scalable and flexible XDR solutions that can be easily integrated with existing IT environments.
 

Palo Alto Networks integrates its XDR capabilities with its broader security platform, including its next-generation firewalls, Prisma Cloud, and Cortex security solutions. The company also focuses on strategic partnership and acquisition activities to enhance its XDR capabilities and expand its market presence.
 

Extended Detection and Response Market Companies

Some of the leading participants in the extended detection and response industry include:

• Crowdstrike
• Cybereason
• Fortinet
• IBM
• Microsoft
• Palo Alto Networks
• SentinelOne
• Trellix
• Trend Micro
• VMware
   

Extended Detection and Response Industry News

• In August 2024, Lumifi Cyber Inc. acquired Netsurion to enhance its managed detection and response (MDR) and extended detection and response (XDR) capabilities. The acquisition strengthens Lumifi’s security operations and integrates Netsurion’s expertise and 400 new clients. This move supports Lumifi’s strategic goal to lead in the MDR space, following its previous acquisition of Castra in October 2023.
   
• In October 2022, Secureworks, Inc. released Taegis, an extended detection and response (XDR) platform. It includes Taegis ManagedXDR and Taegis XDR, which enable Japanese enterprises to improve they're 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.
   

The 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 2021 to 2032, for the following segments:

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Market, By Offering

• Solutions
• Services
  • Professional services
  • Managed services

Market, By Deployment Mode

• On-premises
• Cloud

Market, By Organization Size

• Large enterprises 
• SME

Market, By End-use

• BFSI
• Government
• IT & Telecom
• Healthcare
• Manufacturing
• Retail & e-commerce
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of APAC 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of LATAM 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA