Budget evolution from EDR to XDR

This is my fourth article on SOC story. Here is the existing list.

#1 - Differences between SIEM and XDR

#2 - MSSP vs MSDR

#3 - SSDP explanation

#4 - Budget evolution from EDR to XDR (this article)

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Introduction

Companies are increasingly moving from Endpoint Detection and Response (EDR) to Extended Detection and Response (XDR). Forrester even bumped the idea of end of EDR by removing their Wave report on EDR. While EDR focuses on endpoint protection, XDR broadens the scope by integrating threat detection across endpoints, networks, email, cloud workloads, and more. This transition brings significant improvements in visibility and threat response, but it also raises important budgetary concerns for large enterprises. This article explores the financial implications of moving from EDR to XDR, touching on key areas such as upfront investments, technology simplification, workforce management, and long-term ROI.

Budget Considerations in Transition from EDR to XDR

Initial Investment Comparison

When transitioning from EDR to XDR, the upfront investment is a primary concern. EDR solutions typically come with endpoint-specific licenses, while XDR platforms require a broader licensing model that encompasses multiple layers of protection. The cost of an XDR platform can be higher than traditional EDR due to the inclusion of network and cloud monitoring components.

However, while the initial costs for XDR may be higher, they are often offset by eliminating redundant tools. Many companies currently invest in separate security tools for network monitoring, email security, and threat intelligence. Moving to a unified XDR platform can streamline these technologies to measure which ones bring the most, resulting in lower total operational costs.

Budget transfer

Does the EDR budget disappear? Of course not, XDR will get most of his value by EDR telemetry. This means the EDR piece is still there in your budget playing along side with a technology agnostic XDR or being embedded into an XDR vendor offer that will bet a lot on its proprietary EDR as the main data source.?

And this is where it can be hard to compare things that are not similar:

• For XDR products coming as an evolution of EDR, the additional cost can be seen as additional features and capabilities and the budget evolution will start from EDR?
• For XDR products coming as SIEM replacement, the cost modeling is more complex and the new budget might integrate budget lines associated with? SIEM, SOAR and even eventually service provider capabilities.

Infrastructure and Integration Costs

As a transformation project with huge impacts for Security Operations, there will be specific concerns on infrastructure costs. Depending on the capability of your upcoming XDR to ingest data from everywhere and store it long enough to support nearly real time investigation requests, the infrastructure requirements and the associated costs will change. A native cloud XDR design might solve the painpoint to interconnect all related technologies, including other cloud-based solution. It might also solve a huge concern on the cost of building and maintaining the supporting infrastructure.

Regarding integration costs, the XDR shift should be an opportunity to streamline all previously mandatory integration costs to interconnect one technology with another one and making dedicated project for each new integration relation. With XDR as the single pane of glass, the integration complexity should be made invisible to the customer, both in terms of costs and maintenance.

Operational Cost Changes

XDR enables companies to reduce the number of security tools and vendors, which can lower software licensing, maintenance, and personnel costs. For example, by moving from multiple disparate security systems to a unified XDR platform, large organizations can achieve savings in operational expenses . These savings primarily stem from reduced manual intervention, streamlined security operations, and better resource allocation. This Operation Costs optimisation will be especially visible when it will be time to consider how your Security Operations are delivered and if you intend to outsource part of the service to a Manage Service Provider (the previous article of the series MDR/MSSP might be interesting)

Technology Simplification and Efficiency

Simplification of Security Operations

One of the most significant advantages of XDR is the simplification of security operations. EDR solutions, while effective for endpoint security, often work in silos. With XDR, organizations can consolidate endpoint, network, cloud, and application security into one cohesive platform. This consolidation reduces the complexity of managing multiple security tools and makes monitoring easier. In large enterprises, where security teams are often overstretched, this simplification can translate into both cost savings and enhanced efficiency.

There is a strong expectation from large companies for improvement in detection and response efficiency when switching to XDR. This improvement comes from the reduced need to correlate data from different sources manually, thanks to XDR's integrated approach.

Impact on Monitoring and Detection

XDR platforms significantly enhance visibility across the entire threat landscape, leading to better detection and faster response times. The EDR has proven to perform well during the previous decade to fight against real threats on the endpoint level. XDR brings the promise to step it up at the enterprise level to reduce? breach costs, which can save companies millions over time. The whole security community will need to work collectively to define the best orchestration strategies and transform it into real automated playbooks.

Automation and Optimization

XDR platforms offer advanced automation features that help streamline routine tasks such as alert triage, threat hunting, and response actions. Automation reduces the need for manual intervention, allowing security teams to focus on higher-value tasks. Gartner has already stated that SOAR market category will disappear, being integrated more and more into Security Operations Platform.

Skills and Workforce Management

Skillset Evolution and Training Costs

Moving from EDR to XDR have an impact on skills but not as you can guess. While EDR-focused teams are typically proficient in endpoint security, XDR demands broader expertise across network security, cloud, and applications. At least, when your XDR integrates multi data sources, starting from EDR and completed with other inputs. In this case, you get a global console to manage everything and understand any kind of data.?

This shift requires organizations to invest in training and upskilling their workforce, which can increase short-term costs. May be the XDR can bring a silver bullet here by rendering these data into a human readable content. This is not marketing stuff, but I’m pretty proud what we have done in Sekoia.io with our smart descriptions which translate any kind of data structure into sentences that can be understood by a junior SOC analyst.

The investment in training for a single pane of glass can pay off in the long run, as XDR’s automation and simplified management reduce the overall workload on security teams. Some companies may also choose to partner with Managed Detection and Response (MDR) providers to offload some of these responsibilities, further optimizing costs.

Managed Services and External Support

Large enterprises often consider managed services when deploying XDR platforms. Outsourcing parts of security operations can relieve the burden on internal teams and bring in external expertise. This approach can help mitigate labor costs but may come with higher service fees. The previous article speaking on MDR and MSSP can be useful information here, same for new SSDP model

Long-Term ROI and Financial Justification

Cost-Effectiveness Over Time

Although the shift to XDR may involve higher upfront and transformation costs, the long-term benefits often outweighs these expenses. Total Cost of Ownership should be much better within five years due to consolidated tools, reduced breaches, and better resource allocation . The proactive nature of XDR helps mitigate the financial impact of breaches, potentially saving millions in data recovery, legal fees, and brand damage.

Return on Investment (ROI) Metrics

The ROI of XDR is often measured in terms of reduced security incidents, operational efficiency, and lower breach-related costs. A study made by Forrester established that 75% of? decision makers being XDR early adopters consider the top business benefit of XDR is its increased ROI. This comes from technology streamlining, simplified operations, faster response. 91% agree that it enables their team to skip tedious repetitive tasks.

Budget Optimization Strategies for Large Companies

Phased Transition to XDR

Large enterprises can manage budget concerns by adopting a phased approach to XDR deployment. For example, companies can begin by integrating network security into their existing EDR setup and gradually expand to full XDR over several years. This strategy allows companies to spread costs across multiple budget cycles, reducing the immediate financial burden.

Vendor Negotiation and Multi-Year Contracts

Negotiating with vendors is another key strategy for managing the financial transition to XDR. Large enterprises can secure better pricing by committing to multi-year contracts or bundling additional services such as managed detection and response. Companies can also save up interesting discounts by locking in long-term contracts with XDR vendors .

Conclusion

As large companies transition from EDR to XDR, the budget implications are multifaceted. Initial costs may rise due to infrastructure investments and training, but the long-term benefits in terms of cost savings, efficiency, and enhanced security far outweigh these challenges. By carefully planning the transition, optimizing their budgets, and leveraging the full capabilities of XDR, organizations can significantly reduce their total cybersecurity spending while improving their overall security posture.