Managed Detection and Response Market by Security Type (Endpoint, Network, Application, Cloud), Deployment (On-Premises, Hosted), Organization Size (SMEs, and Large Enterprises), Industry Vertical, and Region - Global Forecast to 2022

The Managed Detection and Response (MDR) market size is expected to grow from USD 335.5 Million in 2016 to USD 1,658.0 Million by 2022, at a Compound Annual Growth Rate (CAGR) of 31.6% during the forecast period. The base year considered for the study is 2016 and the forecast period is from 2017 to 2022.

Objectives of the Study

The main objective of the report is to define, describe, and forecast the managed detection and response market size on the basis of security type, deployment, organization size, industry verticals, and regions. The report provides detailed information on the major factors (drivers, restraints, opportunities, and challenges) influencing the growth of the market. The report attempts to forecast the market size with respect to the 5 main regions, namely, North America, Europe, Asia Pacific (APAC), Middle East and Africa (MEA), and Latin America. The report strategically profiles the key market players and comprehensively analyzes their core competencies. It also tracks and analyzes the competitive developments, such as joint ventures, mergers and acquisitions, and new product developments, in the managed detection and response market.

The research methodology used to estimate and forecast the managed detection and response market size began with the collection and analysis of data on the key vendor revenues through secondary sources, including the annual reports and press releases, investor presentations, conferences, and associations (International Multitopic Conference (INMIC), RSA Conference 2017, International Computer Security Association, and National Computer Security Association (NCSA)), technology journals, certified publications, and articles from recognized authors, directories, and databases. The vendor offerings were also taken into consideration to determine the market segmentations. The bottom-up procedure was employed to arrive at the overall market size of the MDR market from the revenue of the key players and their market shares. The managed detection and response market spending across all the regions, along with the geographical split in various industry verticals, was considered to arrive at the overall market size. After arriving at the overall market size, the total market was split into several segments and subsegments, which were then verified through primary research by conducting extensive interviews with key people, such as Chief Executive Officers (CEOs), Vice Presidents (VPs), directors, and executives. The data triangulation and market breakdown procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all the segments and subsegments. The breakdown of the profiles of the primary participants is depicted in the below figure:

To know about the assumptions considered for the study, download the pdf brochure

The managed detection and response market includes various vendors providing MDR solutions, inclusive of hardware appliances, virtual appliances, and cloud-based firewall, to commercial clients across the globe. Companies such as Arctic Wolf Networks (US), BAE Systems (UK), CrowdStrike (US), eSentire (Canada), FireEye (US), F-Secure (Finland), IBM (US), Kudelski Security (Switzerland), mnemonic (Norway), NetWorks Group (US), Optiv Security (US), Paladion (India), Rapid7 (US), Raytheon (US), Redscan Cyber Security (UK), and WatchGuard (US) have adopted partnerships, agreements, and collaborations as the key strategies to enhance their market reach.

Key Target Audience

• Managed service providers
• Cybersecurity vendors
• Consultants
• Systems integrators
• IT security agencies
• Value-added resellers
• Government agencies
• Investors and venture capitalists

The study answers several questions for the stakeholders, primarily, which market segments to focus on in the next 2 to 5 years for prioritizing efforts and investments.

Scope of the Report

The research report segments the managed detection and response market into the following submarkets:

By Security Type

• Endpoint security
• Network security
• Application security
• Cloud security
• Others (ICS security and database security)

By Deployment

• On-premises
• Hosted

By Organization Size:

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

By Industry Vertical:

• Banking, Financial Services, and Insurance (BFSI)
• IT and telecommunications
• Government and defense
• Energy and utilities
• Manufacturing
• Healthcare
• Retail
• Others (media and entertainment, transport and logistics, and education)

By Region:

• North America
• Europe
• APAC
• MEA
• Latin America

Available Customizations

With the given market data, MarketsandMarkets offers customizations as per the company’s specific needs. The following customization options are available for the report:

Geographic Analysis

• Further breakdown of the US and Canada market into security type, deployment, organization sizes, and industry verticals
• Further breakdown of the UK, Germany, and France market into security type, deployment, organization sizes, and industry verticals

Company Information

• Detailed analysis and profiling of additional market players

Technological proliferation and increasing penetration of IoT across various end-user applications is driving the managed detection and response market to USD 1658.0 million by 2022

Managed Detection and Response (MDR) is a modern approach to proactively detect threats and cyber-attacks and respond to them accordingly, thereby helping enterprises protect their cyberinfrastructure from attacks. MDR service enables immediate notification of any threat or vulnerability that allows cybersecurity experts to help an enterprise deal with the problem and provide advice. MDR helps save businesses a significant amount of time and money that otherwise would have been spent dealing with problems after suffering an attack.

Enterprises are highly dependent on Information and Communications Technology (ICT), and it makes them vulnerable to cybercrimes. MDR service provider help organizations manage the critical data produced from thousands of devices including servers, desktops, gateways, and firewalls. Additionally, increasing complications in Information Technology (IT) infrastructure and cyber-attacks, and rise in distrust in Managed Security Service Providers (MSSPs) have forced organizations to reconsider and adopt MDR to tackle the sophisticated cyber-attacks on their IT infrastructure. MDR service providers offer real-time protection to organizations and help reduce the risks of potential attacks.

Next-generation cybersecurity services integrated with advanced technologies, such as machine learning and behavioural analytics and increasing adoption of MDR across SMEs are major opportunities in the market

Managed detection and response services is gaining traction across verticals as organizations have realized to make a significant amount of time and money in MDR services that otherwise would have been spent dealing with problems after suffering an attack. These advanced MDR services offer cutting-edge threat protection, by integrating real-time contextual awareness, automating intelligent security, and providing rapid response and low cost of ownership.

Enterprises MDR service providers are integrating conceptual technologies, such as Artificial Intelligence (AI), machine learning, and pattern recognition into their MDR offerings, which has opened a wide range of growth avenues for various service providers in the industry. However, lack of trust in third-party applications and absence of modern IT infrastructure across organizations are anticipated to affect the market growth over the coming years. Vendors are deploying the concepts of AI, machine learning, and pattern recognition to automatically update the set of security rules to effectively protect an enterprise’s cyberinfrastructure from advanced threats and vulnerabilities.

SMEs are currently dominated by MSSPs due to their capability of providing cost-effective services over a range of security service areas. Although popular MSSPs provide protection from a number of different vulnerabilities, along with the advantages such as low costs, not all processing can be combined, as some protection methods rely on different inspection techniques. It offers a significant opportunity for MDR vendors to come up with innovations to provide these enterprises with cost-effective, consistent, and MDR services with enhanced functionalities, to extend their foothold in the SMEs segment.

Market Dynamics

Table of Contents

1 Introduction (Page No. - 13)
    1.1 Objectives of the Study
    1.2 Market Definition
    1.3 Market Scope
    1.4 Years Considered for the Study
    1.5 Currency
    1.6 Stakeholders

2 Research Methodology (Page No. - 16)
    2.1 Research Data
           2.1.1 Secondary Data
           2.1.2 Primary Data
                    2.1.2.1 Breakdown of Primary Interviews
                    2.1.2.2 Key Industry Insights
    2.2 Market Size Estimation
    2.3 Research Assumptions and Limitations
           2.3.1 Assumptions
           2.3.2 Limitations

3 Executive Summary (Page No. - 22)

4 Premium Insights (Page No. - 25)
    4.1 Attractive Market Opportunities in the Managed Detection and Response Market
    4.2 Managed Detection and Response Market, By Region, 2017–2022
    4.3 Market, By Security Type, 2017–2022
    4.4 Market, By Organization Size, 2017–2022
    4.5 Market, By Deployment, 2017–2022
    4.6 Managed Detection and Response Market, By Industry Vertical, 2017–2022
    4.7 Lifecycle Analysis, By Region

5 Market Overview and Industry Trends (Page No. - 29)
    5.1 Market Dynamics
           5.1.1 Drivers
                    5.1.1.1 Growing Incidents of Cyber-Attacks and Threats Targeting Enterprises
                    5.1.1.2 Shortage of Cybersecurity Professionals and Budget Constraints
                    5.1.1.3 Government Regulations and Need for Compliance Drive the Adoption of MDR Services
                    5.1.1.4 Technological Proliferation and Increasing Penetration of Iot
           5.1.2 Restraints
                    5.1.2.1 Lack of Trust in Third-Party Applications
           5.1.3 Opportunities
                    5.1.3.1 Partnerships With Traditional Service Providers
                    5.1.3.2 Introduction of Machine Learning/Ai-Powered MDR Services
                    5.1.3.3 Increasing Adoption of MDR Across SMES
           5.1.4 Challenges
                    5.1.4.1 Lack of Modern IT Infrastructure
                    5.1.4.2 Potential Cyber-Attacks on MDR Service Provider's Infrastructure
    5.2 Regulatory Implications
           5.2.1 Payment Card Industry Data Security Standard (PCI–DSS)
           5.2.2 Health Insurance Portability and Accountability Act (HIPAA)
           5.2.3 Federal Information Security Management Act (FISMA)
           5.2.4 Gramm-Leach-Bliley Act (GLBA)
           5.2.5 Sarbanes-Oxley Act (SOX)
           5.2.6 The International Organization for Standardization (ISO) Standard 27001
           5.2.7 European Union General Data Protection Regulation (EU GDPR)
    5.3 Innovation Spotlight

6 Managed Detection and Response Market Analysis, By Security Type (Page No. - 37)
    6.1 Introduction
    6.2 Endpoint Security
    6.3 Network Security
    6.4 Application Security
    6.5 Cloud Security
    6.6 Others

7 Managed Detection and Response Market Analysis, By Deployment (Page No. - 44)
    7.1 Introduction
    7.2 On-Premises
    7.3 Hosted

8 Managed Detection and Response Market Analysis, By Organization Size (Page No. - 48)
    8.1 Introduction
    8.2 Small and Medium-Sized Enterprises
    8.3 Large Enterprises

9 Managed Detection and Response Market Analysis, By Industry Vertical (Page No. - 52)
    9.1 Introduction
    9.2 Banking, Financial Services, and Insurance
    9.3 IT and Telecommunications
    9.4 Government and Defense
    9.5 Energy and Utilities
    9.6 Manufacturing
    9.7 Healthcare
    9.8 Retail
    9.9 Others

10 Geographic Analysis (Page No. - 61)
     10.1 Introduction
     10.2 North America
     10.3 Europe
     10.4 Asia Pacific
     10.5 Middle East and Africa
     10.6 Latin America

11 Company Profiles (Page No. - 76)
     11.1 Esentire
(Overview, Strength of Product Portfolio, Business Strategy Excellence, and Recent Developments)*
     11.2 Bae Systems
     11.3 Fireeye
     11.4 IBM
     11.5 Optiv Security
     11.6 Kudelski Security
     11.7 Paladion
     11.8 Arctic Wolf Networks
     11.9 Watchguard
     11.10 Rapid7
     11.11 Raytheon
     11.12 Redscan
*Details on Overview, Strength of Product Portfolio, Business Strategy Excellence, and Recent Developments Might Not Be Captured in Case of Unlisted Companies.
     11.13 Key Innovators
             11.13.1 F-Secure
             11.13.2 Crowdstrike
             11.13.3 Networks Group
             11.13.4 Mnemonic

12 Appendix (Page No. - 113)
     12.1 Discussion Guide
     12.2 Knowledge Store: Marketsandmarkets’ Subscription Portal
     12.3 Introducing RT: Real-Time Market Intelligence
     12.4 Available Customizations
     12.5 Related Reports
     12.6 Author Details

List of Tables (44 Tables)

Table 1 United States Dollar Exchange Rate, 2014–2016
Table 2 Innovation Spotlight: Latest Managed Detection and Response Innovations
Table 3 Managed Detection and Response Market Size, By Security Type, 2015–2022 (USD Million)
Table 4 Endpoint Security: Market Size, By Region, 2015–2022 (USD Million)
Table 5 Network Security: Market Size, By Region, 2015–2022 (USD Million)
Table 6 Application Security: Market Size, By Region, 2015–2022 (USD Million)
Table 7 Cloud Security: Market Size, By Region, 2015–2022 (USD Million)
Table 8 Others: Market Size, By Region, 2015–2022 (USD Million)
Table 9 Managed Detection and Response Market Size, By Deployment, 2015–2022 (USD Million)
Table 10 On-Premises: Market Size, By Region, 2015–2022 (USD Million)
Table 11 Hosted: Market Size, By Region, 2015–2022 (USD Million)
Table 12 Managed Detection and Response Market Size, By Organization Size, 2015–2022 (USD Million)
Table 13 Small and Medium-Sized Enterprises: Market Size, By Region, 2015–2022 (USD Million)
Table 14 Large Enterprises: Market Size, By Region, 2015–2022 (USD Million)
Table 15 Managed Detection and Response Market Size, By Industry Vertical, 2015–2022 (USD Million)
Table 16 Banking, Financial Services, and Insurance: Market Size, By Region, 2015–2022 (USD Million)
Table 17 IT and Telecommunications: Market Size, By Region, 2015–2022 (USD Million)
Table 18 Government and Defense: Market Size, By Region, 2015–2022 (USD Million)
Table 19 Energy and Utilities: Market Size, By Region, 2015–2022 (USD Million)
Table 20 Manufacturing: Market Size, By Region, 2015–2022 (USD Million)
Table 21 Healthcare: Market Size, By Region, 2015–2022 (USD Million)
Table 22 Retail: Market Size, By Region, 2015–2022 (USD Million)
Table 23 Others: Market Size, By Region, 2015–2022 (USD Million)
Table 24 Managed Detection and Response Market Size, By Region, 2015–2022 (USD Million)
Table 25 North America: Market Size, By Security Type, 2015–2022 (USD Million)
Table 26 North America: Market Size, By Deployment, 2015–2022 (USD Million)
Table 27 North America: Market Size, By Organization Size, 2015–2022 (USD Million)
Table 28 North America: Market Size, By Industry Vertical, 2015–2022 (USD Million)
Table 29 Europe: Managed Detection and Response Market Size, By Security Type, 2015–2022 (USD Million)
Table 30 Europe: Market Size, By Deployment, 2015–2022 (USD Million)
Table 31 Europe: Market Size, By Organization Size, 2015–2022 (USD Million)
Table 32 Europe: Market Size, By Industry Vertical, 2015–2022 (USD Million)
Table 33 Asia Pacific: Managed Detection and Response Market Size, By Security Type, 2015–2022 (USD Million)
Table 34 Asia Pacific: Market Size, By Deployment, 2015–2022 (USD Million)
Table 35 Asia Pacific: Market Size, By Organization Size, 2015–2022 (USD Million)
Table 36 Asia Pacific: Market Size, By Industry Vertical, 2015–2022 (USD Million)
Table 37 Middle East and Africa: Managed Detection and Response Market Size, By Security Type, 2015–2022 (USD Million)
Table 38 Middle East and Africa: Market Size, By Deployment, 2015–2022 (USD Million)
Table 39 Middle East and Africa: Market Size, By Organization Size, 2015–2022 (USD Million)
Table 40 Middle East and Africa: Market Size, By Industry Vertical, 2015–2022 (USD Million)
Table 41 Latin America: Managed Detection and Response Market Size, By Security Type, 2015–2022 (USD Million)
Table 42 Latin America: Market Size, By Deployment, 2015–2022 (USD Million)
Table 43 Latin America: Market Size, By Organization Size, 2015–2022 (USD Million)
Table 44 Latin America: Market Size, By Industry Vertical, 2015–2022 (USD Million)

List of Figures (31 Figures)

Figure 1 Global Managed Detection and Response Market: Market Segmentation
Figure 2 Global Managed Detection and Response Market: Research Design
Figure 3 Data Triangulation
Figure 4 Market Size Estimation Methodology: Bottom-Up Approach
Figure 5 Market Size Estimation Methodology: Top-Down Approach
Figure 6 Banking, Financial Services, and Insurance Industry Vertical is Estimated to Hold the Largest Market Share in 2017
Figure 7 North America is Estimated to Hold the Largest Market Share in 2017
Figure 8 Growing Instances of Cyber-Attacks and Threats Targeting Enterprises and the Need for Compliance are Expected to Drive the Managed Detection and Response Market
Figure 9 Asia Pacific is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 10 Cloud Security Type is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 11 Small and Medium-Sized Enterprises Segment is Expected to Grow at A Higher CAGR During the Forecast Period
Figure 12 Hosted Deployment Segment is Expected to Grow at A Higher CAGR During the Forecast Period
Figure 13 Energy and Utilities Industry Vertical is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 14 The Managed Detection and Response Market has Significant Growth Opportunities in Asia Pacific
Figure 15 Managed Detection and Response Market: Drivers, Restraints, Opportunities, and Challenges
Figure 16 Major Cyber-Attack Types, Global, 2015 vs 2016
Figure 17 Cloud Security Segment is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 18 Hosted Deployment Segment is Expected to Grow at A Higher CAGR During the Forecast Period
Figure 19 Small and Medium-Sized Enterprises Segment is Expected to Grow at A Higher CAGR During the Forecast Period
Figure 20 Energy and Utilities Industry Vertical is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 21 Asia Pacific Region is Expected to Grow at the Highest CAGR During the Forecast Period
Figure 22 Asia Pacific is Expected to Exhibit the Highest Growth Rate in the Managed Detection and Response Market During the Forecast Period
Figure 23 North America: Market Snapshot
Figure 24 Asia Pacific: Market Snapshot
Figure 25 Bae Systems: Company Snapshot
Figure 26 Fireeye: Company Snapshot
Figure 27 IBM: Company Snapshot
Figure 28 Kudelski Security: Company Snapshot
Figure 29 Rapid7: Company Snapshot
Figure 30 Raytheon: Company Snapshot
Figure 31 F-Secure: Company Snapshot

MarketsandMarkets forecasts the global managed detection and response market size to grow from USD 419.7 Million in 2017 to USD 1,658.0 Million by 2022, at a Compound Annual Growth Rate (CAGR) of 31.6% during the forecast period.

The managed detection and response market is segmented on the basis of security type, deployment, organization size, industry vertical, and regions. The security type segment is further segmented into endpoint, network, application, cloud, and others. The other security types subsegment comprises Industrial Control System (ICS) security and database security. The deployment segment is further segmented into on-premises, and hosted MDR services.

Hosted MDR services remotely manage and monitor an enterprises’ cyberinfrastructure regardless of Customer Premises Equipment (CPE) and provide the best protection against vulnerabilities, such as malware, phishing, ransomware, and the emerging cyber threats. These cloud-based MDR services provide protection and safeguard the enterprise network, and offer capabilities, such as bot detection and enforcement, access control, malware detection, and threat intelligence. Cloud-based deployment of MDR solutions is projected to gain pace, owing to the increased adoption of cloud computing technologies across organizations operating across various industry verticals. The growth in the hosted MDR services is attributed to a significant increase in the government regulations and compliance requirements in the global cybersecurity scenario.

MDR is essentially evolved out of Managed Security Services (MSS) and possesses advanced threat detection and incident response capabilities. MDR service enables immediate notification of any threat or vulnerability that allows cybersecurity experts to help an enterprise deal with the problem and provide advice. MDR helps save businesses a significant amount of time and money that otherwise would have been spent dealing with problems after suffering an attack. The managed detection and response market is expected to witness increased demand, owing to the increasing adoption of concepts such as enterprise mobility and Internet of Things (IoT), the rise in instances of cyber-attacks, such as fraud, espionage, vandalism, and cyber theft. Stringent government regulations, need for compliance, and shortage of cybersecurity practitioners across enterprises are expected to further proliferate demand for MDR services. Additionally, increasing adoption of MDR services across SMEs and partnerships with traditional managed service providers has opened a wide range of growth avenues for the vendors in the global MDR marketspace.

Leading MDR vendors are offering machine learning and Artificial Intelligence (AI) based services, which play vital roles in the MDR arena. Major MDR vendors offer services that are interoperable and enable all the required endpoints, technologies, and applications to interact in the organization’s cyberinfrastructure, thus facilitating effective threat detection and response.

In 2017, the global managed detection and response market is dominated by North America, as it is considered the most advanced region in terms of the adoption of innovative cybersecurity solutions and services to protect cyberinfrastructure. Additionally, the region is affected by cybersecurity breaches, and as a result, has the largest number of cybersecurity vendors. The growing concern for the security of critical infrastructure and sensitive data has increased government intervention in the recent years. Specific budget allocations, support by the government, and mandated cybersecurity policies have led to an increased adoption of such services, thereby driving the demand for MDR services in the region.

APAC is expected to grow at the highest CAGR during the forecast period. The region is highly concerned with increasing security spending owing to the ever-growing threat landscape. It comprises major countries such as India, China, Australia, Hong Kong, and Japan. Moreover, the region witnesses increasing number of SMEs, which are most vulnerable to advanced cyber-attacks. The region’s rapid economic growth, political transformation, and increasing awareness regarding cyber threats in the recent years have driven the adoption of cybersecurity solutions and services across enterprises operating in various industry verticals.

The study measures and evaluates the major offerings and key strategies of the major market vendors, including Arctic Wolf Networks (US), BAE Systems (UK), CrowdStrike (US), eSentire (Canada), FireEye (US), F-Secure (Finland), IBM (US), Kudelski Security (Switzerland), mnemonic (Norway), NetWorks Group (US), Optiv Security (US), Paladion (India), Rapid7 (US), Raytheon (US), Redscan Cyber Security (UK), and WatchGuard (US). These companies have been at the forefront in offering reliable MDR services to the commercial clients across diverse locations.

The growth of managed detection and response market is depending on the factors, such as shortage of skilled security practitioners, stringent government policies, and need for compliance are expected to drive the MDR market over the next 5 years

MDR service providers are introducing advanced MDR services integrated with machine learning and artificial intelligence for different security types to identify the anomalies in the organizations’ network.

Endpoint Security

Endpoint security is the security provided on network devices, such as servers, desktops, laptops, smartphones, tablets, barcode readers, and Point of Sale (POS), which are connected to a client server. Network devices are nothing but the endpoints. These network devices are connected remotely which creates an entry point for potential cyber threats. Endpoint security solutions include antivirus, antispyware/malware, encryption personal firewall, IDS/IPS, patch and configuration management, behavioural blocking software, and virtualization security. These solutions provide continuous real-time threat detection, prevention, and response to the network devices (endpoints). Rapid growth in the number of mobile devices across the globe is one of the driving factors for this market. Due to the increasing number of mobile devices, networks are getting more vulnerable to cyber-attacks.

Network Security

Network security is needed by organizations to protect their networking infrastructure from numerous threats, such as SQL injection, DDoS attacks, and XSS. Network security involves safeguarding the computer network and network-accessible resources of an enterprise. Network security products and services are used to detect and prevent cyber threats. They include multiple components, such as network monitoring and security software, hardware, and appliances, which work together as layers of comprehensive network security. MDR services deliver advanced threat detection, investigation, and response capabilities to secure the network environment. MDR network services use network sensors to keep track of network communications. Due to the increasing trend of BYOD adoption at the workplace, data access through remote devices, which is not limited to data centres, creates the possibility of data vulnerability.

Application Security

Application security involves software and hardware countermeasures to protect mobile and web applications as well as confidential information from security attacks. It works with a set of security policies applied at 3 layers: the network layer, host layer, and application layer. Application security ensures the confidentiality and integrity of the data transferred between mobile applications. MDR application security services provide countermeasures to secure applications from glitches and external threats, such as DDoS, web attacks, frauds, and site scraping.

Cloud Security

Cloud security includes security product and services that protect the data stored online. Cloud security essentially safeguards organizations’ critical assets from threats, such as data loss, data breaches, service traffic hijacking, account hijacking, insecure APIs, and DDoS. In cloud security, service providers follow regulatory requirements for storing sensitive customer data, such as credit card numbers and personal data. Cloud adoption across various industry vertical is increasing due to the cost-effectiveness and scalability of cloud solutions.

Key questions

• Which are the substitute products and how big is the threat from them?
• Which are the top use cases where managed detection and response services can be implemented for revenue generation through new advancements such as artificial intelligence, IoT, and cloud computing?
• What are the potential opportunities in the adjacent markets, such as managed security services and endpoint detection and response?
• What should be your go-to-market strategy to expand the reach into developing countries across APAC, MEA, and Latin America?

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