U.S. Extended Detection and Response (XDR) Market Size, Share, Trends, Industry Analysis Report

Market Overview

The U.S. extended detection and response (XDR) market size was valued at USD 1.73 billion in 2024 and is anticipated to register a CAGR of 30.6% from 2025 to 2034. The growing number of sophisticated cyberattacks drives the market growth. The ongoing shift to cloud and hybrid work environments also increases the need for security that covers all areas. In addition, the demand for XDR is growing as it helps companies deal with the shortage of skilled cybersecurity professionals by automating tasks.

Key Insights

• By offering, the solutions segment held the largest market share in 2024 as it provides the core technology that forms the foundation of any XDR deployment.
• By organization size, the large enterprises segment represented the largest share in 2024 due to their complex and extensive IT environments, which are prime targets for cyberattacks.
• By deployment mode, the on-premises segment dominated in 2024 as many enterprises prefer to keep sensitive data and critical systems within their own physical control.
• By vertical, the IT and ITES segment held the largest share in 2024 due to its heavy reliance on digital infrastructure and cloud services.

Industry Dynamics

• The increasing number of sophisticated and organized cyberattacks, such as ransomware and zero-day exploits, is driving the need for better security. Companies are seeking ways to get a complete view of their network and respond quickly to threats that can be hard to spot with older security tools.
• The rapid adoption of cloud computing and hybrid work models has made the digital landscape more complex. With data and devices spread out across many different environments, companies need a unified solution that can provide visibility and protection across endpoints, networks, and cloud infrastructure, which boosts the demand for XDR.
• A growing shortage of skilled cybersecurity professionals is causing businesses to adopt automated solutions. XDR platforms help to fill this gap by using artificial intelligence and machine learning to automate threat detection, analysis, and response. This reduces the workload on security teams and improves overall efficiency.

Market Statistics

• 2024 Market Size: USD 1.73 billion
• 2034 Projected Market Size: USD 24.86 billion
• CAGR (2025–2034): 30.6%

AI Impact on U.S. Extended Detection And Response Market

• AI integration transforms the way organizations detect, investigate, and respond to cyber threats. AI integration in XDR turns reactive security into proactive defense.
• AI enhances extended detection and response by automating anomaly detection across endpoints, cloud workloads, networks, and identity systems.
• Generative AI is used to analyze threat signals and prioritize high-risk alerts, which helps reduce false positives.
• AI tools are gaining traction across sectors such as finance, healthcare, and government, which face sophisticated threats. The tools predict emerging attack vectors. It enables security teams to strengthen their defenses proactively.

Extended detection and response, or XDR, is a cybersecurity technology that helps organizations better fight cyber threats. It collects data from different security tools across a company's entire technology system. This includes endpoints such as computers, networks, and cloud environments, giving a complete picture of threats and making it easier to find and respond to them quickly.

The rising need for better security to meet compliance standards drives the industry growth. Many industries, especially those handling a lot of personal or financial data, must follow strict government regulations. These rules often require a high level of data protection and specific reporting on security incidents. XDR helps companies comply with these standards by giving a centralized and automated way to track and prove their security efforts.

Another factor boosting the market is the growing trend of managed security services. Many organizations, especially smaller ones, do not have the staff or expertise to run a full security operations center in-house. These managed XDR services, or MXDR, enable companies to get the benefits of advanced security without the need to hire additional personnel. This makes the technology more accessible to a wider range of businesses.

Drivers and Trends

Rising Sophistication of Cyberattacks: The increasing complexity and number of cyberattacks are a main driver for the U.S. extended detection and response market. As threat actors get more advanced, they employ a combination of methods, such as combining malware with social engineering and zero-day exploits. This makes it difficult for traditional security tools to keep up. Organizations are constantly facing new and changing threats or identity threat detection and response that can bypass older, single-point security defenses. This highlights the need for a solution that can provide a wider view of an attack, from start to finish.

According to the Federal Bureau of Investigation's Internet Crime Complaint Center (IC3) report for 2023, the number of ransomware complaints in the U.S. reported a notable increase of 18% compared to the previous year. The report also highlights a significant rise in total losses from all reported internet crimes, which reached a staggering $12.5 billion in 2023, up 22% from 2022. These stats show how expensive and widespread cybercrime has become, which pushes businesses to invest in more advanced and integrated security systems. This increasing threat landscape is a major factor driving the demand for XDR solutions.

Shift to Cloud and Hybrid Work Models: The widespread adoption of cloud computing and hybrid work models is another key driver for the market. As businesses move their data and operations to the cloud and allow employees to work from different locations, the traditional network security perimeter has disappeared. This creates a much larger and more complex area to defend, with data and devices spread out across various platforms and locations. Older security tools that focus on a single network point are no longer effective in this new, distributed environment.

In a 2024 report on the "Cybersecurity Posture of the United States," the White House acknowledged the rapid increase in the complexity of the economy and society due to technologies such as cloud computing. The report also noted that nation-state adversaries are more willing to use cyber capabilities to attack critical infrastructure. This move to the cloud, combined with a wider range of targets for attackers, has made it essential for organizations to have a security system that provides complete visibility and control over all their assets, no matter where they are. This need for unified protection across cloud and on-premises systems is fueling the growth of XDR.

Segmental Insights

Offering Analysis

Based on offering, the segmentation includes solutions and services. The solutions segment held the largest share in 2024. This is mainly because solutions form the core of any XDR implementation, providing the foundational technology that brings together data from across an organization's security tools. These solutions offer a complete and unified view of the entire threat landscape, which is essential for modern cybersecurity. They include a wide range of platforms and software that automate threat detection and response, such as AI-powered analytics, behavioral analysis, and threat intelligence. Owing to the high demand for these automated, integrated platforms, businesses are focusing on improving their security infrastructure without adding complexity. As cyberattacks become more sophisticated, the need for a single, comprehensive platform to manage and respond to these threats is a primary factor for the dominance of the solutions segment.

The services segment is anticipated to register the highest growth rate during the forecast period. A few examples of XDR services are managed detection and response (MDR), professional services, and training. The significant shortage of skilled cybersecurity professionals propels the segment growth. Many organizations, particularly small and medium-sized businesses, lack the internal expertise or resources to manage a full-scale XDR platform independently. Services, such as managed XDR or MXDR, fill this gap by allowing businesses to outsource their cybersecurity to expert providers. These services offer 24/7 monitoring, incident response, and threat hunting, providing a high level of security without the need for a large in-house team. The growing complexity of cyber threats and the need for constant vigilance also make these services highly appealing.

Organization Size Analysis

Based on organization size, the U.S. extended detection and response market segmentation includes SMEs and large enterprises. The large enterprises segment held the largest share in 2024. This is mainly attributed to their complex and large IT environments, which include a huge number of endpoints, networks, and cloud applications. This creates a much larger and more difficult area to defend. Owing to their size and the high value of their data, large companies are also a prime target for sophisticated cyberattacks. They have the financial resources and a strong need to invest in a comprehensive security solution that can protect their entire infrastructure. This makes XDR an essential tool for them to get a complete view of their network and quickly respond to advanced threats that could cause a lot of damage. They also have the internal resources and security teams to manage and integrate these complex platforms.

The small and medium-sized enterprises, or SMEs, segment is anticipated to register the highest growth rate during the forecast period. Even though their small size, SMEs are increasingly becoming targets for cyberattacks. They often lack the robust security defenses of larger companies, making them more vulnerable. Also, SMEs typically do not have a dedicated security team or a large budget to purchase and manage multiple security tools. The rise of cloud-based and managed XDR services has made this advanced security technology much more affordable and easier to use for them. These services enable SMEs to get high-level protection without hiring more staff or dealing with the complexity of managing the platform themselves, which is a major factor fueling their rapid adoption.

Deployment Mode Analysis

Based on deployment mode, the U.S. extended detection and response market segmentation includes cloud, on-premises, and hybrid. The on-premises segment held the largest share in 2024. This is due to the historical preference of many large enterprises, especially in highly regulated sectors such as finance and government, to keep sensitive data and critical systems within their own physical control. These organizations have already invested heavily in their on-site IT infrastructure and security teams, and they prioritize having full control over their security data and systems. The on-premises model provides them with a sense of greater security, as data never leaves their local network. This deployment mode also helps them meet strict compliance and data sovereignty requirements that are sometimes more difficult to achieve with cloud-based solutions. For these companies, the ability to manage everything internally and have complete control over their data's location and access is a key factor in their choice of XDR deployment.

The cloud-based segment is anticipated to register the highest growth rate during the forecast period. This surge is driven by the increasing shift of businesses to cloud environments and the rise of remote and hybrid work models. Cloud-based XDR solutions offer a high degree of flexibility, scalability, and cost-effectiveness compared to their on-premises counterparts. They do not require a large upfront investments in hardware and can be deployed quickly and easily. For small and medium-sized businesses that lack the resources to build a full security operations center, cloud-based XDR is an attractive option. It allows them to access advanced security features on a subscription basis, reducing the complexity and financial burden of managing their AI trust, risk, and security management. The ability of cloud-based XDR to provide unified visibility and threat detection across distributed, multi-cloud, and remote work environments is a major reason for its rapid adoption.

Vertical Analysis

Based on vertical, the segmentation includes government, manufacturing, energy & utilities, retail & e-commerce, healthcare, IT & ITES, and others. The IT & ITES segment held the largest share in 2024. This is because the industry is highly dependent on digital systems and cloud infrastructure. Companies in this sector handle massive amounts of sensitive data and intellectual property, making them a prime target for cyberattacks. The IT and ITES sector also faces a constant need to protect a large number of endpoints, as its workforce is often distributed and uses various devices. As these businesses are at the forefront of technology, they are among the first to adopt new cybersecurity solutions to secure their complex and dynamic environments. The early and widespread adoption of XDR in this vertical has contributed to the leading position of the segment.

The retail and e-commerce vertical is anticipated to register the highest growth rate during the forecast period. This is due to the rapid digital transformation of the retail industry, including the rise of online shopping, mobile payments, and interconnected supply chains. As retailers collect and process vast amounts of customer data, they have become a major target for cybercriminals. Traditional security methods are not enough to protect against attacks on point-of-sale systems, e-commerce platforms, and customer databases. The growing need to protect sensitive customer information and maintain trust has pushed retailers to invest in more advanced, integrated security solutions such as XDR. The high number of endpoints and complex, multi-channel operations in this sector also makes XDR particularly useful for getting a complete view of their security.

Key Players and Competitive Insights

The competitive landscape for the U.S. extended detection and response market is shaped by both large, well-established security companies and innovative, younger players. The market is competitive, with companies constantly improving their products by adding new features such as artificial intelligence and machine learning to stay ahead of threats. Major companies in this space include Palo Alto Networks, Microsoft, CrowdStrike, SentinelOne, and Trend Micro. These companies often offer their own complete XDR platforms, which are known as native XDR. Also, they compete on factors such as their ability to integrate with different security tools, the breadth of their threat intelligence, and the level of automation they provide. The competition is also centered on providing solutions that are easy for security teams to use and can be customized to fit the specific needs of an organization.

A few prominent companies in the industry include Palo Alto Networks; Microsoft Corporation; CrowdStrike; SentinelOne; Trellix; Cisco Systems, Inc.; Sophos Group PLC; Trend Micro Incorporated; Cybereason; and Broadcom Inc.

Key Players

• Broadcom Inc.
• Cisco Systems, Inc.
• CrowdStrike
• Cybereason
• Microsoft Corporation
• Palo Alto Networksa
• SentinelOne
• Sophos Group PLC
• Trellix
• Trend Micro Incorporated

U.S. Extended Detection and Response Industry Developments

July 2025: Palo Alto Networks announced a deal to acquire CyberArk, a leader in identity security. This move is designed to create a more complete security platform for the trend of artificial intelligence.

U.S. Extended Detection and Response Market Segmentation

By Offering Outlook (Revenue – USD Billion, 2020–2034)

• Solutions
• Services

By Organization Size Outlook (Revenue – USD Billion, 2020–2034)

• SMEs
• Large Enterprises

By Deployment Mode Outlook (Revenue – USD Billion, 2020–2034)

• Cloud
• On-Premises
• Hybrid

By Vertical Outlook (Revenue – USD Billion, 2020–2034)

• Government
• Manufacturing
• Energy & Utilities
• Retail & E-Commerce
• Healthcare
• IT & ITES
• Others

U.S. Extended Detection and Response Market Report Scope