MDR, Content

Managed Detection and Response (MDR): Slowing Market Growth?

Managed Detection and Response (MDR) has been a hot-growth cybersecurity market for several years now. But MDR sales may be seeing slowing growth amid the coronavirus pandemic and associated economic fallout.

Among the proof points: MDR revenues continued to grow in Q2 -- although at a slower pace due to the pandemic impacting new sales, F-Secure CEO Samu Konttinen disclosed on July 16 in a company earnings report. "The underlying demand for the managed detection and response solutions remains good, while we expect quarterly variation in new sales to continue," Konttinen said.

Additional takeaways from F-Secure's Q2 earnings statement include:

  • The endpoint security business continued to grow slightly while orders grew faster than the revenue.
  • Cybersecurity consulting was hit by the COVID-19 pandemic, which triggered a 19 percent revenue reduction in Q2 2020 compared to Q2 2019. In response, F-Secure has implemented furloughs -- though headcount figures were not disclosed.
  • New client acquisition faced a significant slowdown as well.
  • Towards the end of the quarter, the company's sales performance improved, but the pandemic still casts a shadow on the predictability of the business, F-Secure indicated.

Admittedly, those data points represent the view of only one company. MSSP Alert will be watching and listening closely as more security companies announce quarterly results in the days ahead.

In the meantime, it's unclear if or how the pandemic will pressure the MDR market over the long haul. Before the pandemic emerged, the global MDR solutions market was projected to expand at a compound annual growth rate (CAGR) of 16.4 percent between 2020 and 2024, with revenues expected to reach $1.9 billion by 2024, according to Frost & Sullivan.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.