A stronger case for endpoint security

Perspectives from BofA Global Research’s Leading Analysts

August 28, 2024

 

Josh Shanker

Tal Liani, Senior Research Analyst, Data Networking and Networking Security

One rotten apple doesn’t spoil the whole barrel; similarly, one global outage caused by a faulty software update to an endpoint security solution doesn't mean that enterprises will reconsider or reverse the expansion of their endpoint security platforms.

 

Endpoint security, which protects network entry points like laptops and desktops from malicious actors, has evolved into a critical component of any comprehensive cyber-threat defense system. Positioned in close proximity to users, data and applications, endpoints play a pivotal role in a Zero Trust Security framework. In today's landscape, where implicit trust is no longer viable, robust endpoint security solutions are more crucial than ever. Enterprises can no longer rely on traditional perimeter defenses; once traffic moves laterally within the network unchecked, the potential for damage increases exponentially. Zero Trust principles dictate that security measures must be enforced from the moment traffic enters the network and continuously accompany it, ensuring that policies and configurations are consistently applied. This approach is essential for effectively detecting and preventing threats, thereby safeguarding digital assets.

 

Endpoints are the origin of every data packet, making them fundamental to functions such as data classification and loss prevention, data encryption, threat monitoring and user-access policy enforcement — tasks that were traditionally confined to the network's core. Enterprises are gradually recognizing the importance of endpoint protection, leading to increased adoption over time. As these solutions transitioned to the cloud and integrated with advanced detection mechanisms — collectively known as Extended Detection and Response (XDR) — the role of endpoint security has dramatically expanded. It is no longer just a replacement for antivirus software; it is now a sophisticated solution that leverages the cloud to implement a wide range of security functions, including Firewall Management, Device Control, Identity Protection, IT hygiene, Data Protection and Next-Generation Security Information and Event Management (SIEM), among others.

 

The significance of endpoint security is further evidenced by the growth of leading providers. For instance, 50% or more of growth for two of the leading endpoint security vendors comes from upselling new modules to existing XDR deployments, continually expanding the scope of endpoint security solutions.

 

To provide a few examples, identity policies, once solely managed within the network core, are now being reinforced at the endpoint level, ensuring proper implementation and enforcement. In simple terms, using an analogy to a high-end restaurant or club: if identity inspection was previously handled at the entrance by the bouncer, endpoint identity adds another layer of protection by having the bouncer accompany you throughout your journey within the organization, ensuring you only perform tasks that align with company policies. Similarly, endpoint solutions enhance cloud security by providing runtime security — a continuous, end-to-end monitoring of activity within containers, hosts and serverless functions. These endpoint clients offer real-time visibility into network and data components, enabling the detection of suspicious or anomalous activity.

 

As such, despite concerns that recent global outages might deter enterprises from adopting advanced endpoint security solutions, the opposite should be true. Consider what might have happened if the outage had been caused by a cyber threat rather than an update error that is relatively easy to trace and remediate. The outage underscores the vital importance of endpoints to network health and highlights the critical need for the highest level of protection at the endpoint level. We expect 20%+ revenue growth for our preferred endpoint security vendors over the next several years.