Beyond EDR: Why Modern Organizations Need Zero Trust Microsegmentation

The Evolving Threat Landscape Demands Multi-Layered Security

In today's increasingly complex threat landscape, manufacturing and healthcare organizations face unprecedented cybersecurity challenges. The surge in sophisticated cyberattacks has exposed a troubling reality: relying solely on Endpoint Detection and Response (EDR) solutions no longer provides adequate protection against modern threats. While EDR technologies remain crucial components of security architecture, recent attack patterns demonstrate that even the most advanced endpoint protection can be bypassed, disabled, or completely circumvented by determined attackers.

Recent statistics paint a concerning picture. Ransomware attacks rose 15% in 2024, with manufacturing and healthcare sectors being particularly targeted. This dramatic increase stems from various factors, including the proliferation of remote work environments, the growing sophistication of threat actors, and the commoditization of ransomware-as-a-service. However, one of the most alarming trends is attackers' increasing ability to bypass traditional security measures through innovative lateral movement techniques.

Why EDR Alone Cannot Provide Complete Protection

EDR solutions provide valuable protection by monitoring endpoints for suspicious activities and responding to potential threats. However, they operate with inherent limitations that create significant security gaps in today's complex environments.

The Critical Blind Spots Beyond Endpoints

The most significant limitation of EDR is its scope. EDR tools only protect devices where agents can be deployed, leaving substantial portions of the network unmonitored. In manufacturing environments with operational technology (OT) systems and healthcare settings with numerous Internet of Medical Things (IoMT) devices, this creates dangerous blind spots where threats can develop undetected.

Consider the various devices in a typical manufacturing facility: industrial control systems, legacy equipment, and specialized machinery often cannot run EDR agents due to performance concerns, compatibility issues, or warranty restrictions. Similarly, healthcare environments feature an increasing array of connected medical devices that cannot support traditional endpoint protection. These unprotected devices offer attackers ideal entry points into the network, allowing them to establish footholds before moving laterally to more critical systems.

Performance and Deployment Challenges

For large enterprises with thousands of endpoints, managing EDR agents across the entire device fleet presents significant operational challenges. Performance degradation on endpoints, particularly older hardware, can impact business operations. Additionally, maintaining, updating, and ensuring consistent policy enforcement across all endpoints becomes increasingly complex as organizations scale.

The burden of deploying and maintaining agents on every endpoint creates substantial overhead for security teams. In resource-constrained environments, ensuring complete coverage becomes nearly impossible, leaving gaps that attackers can exploit.

How Attackers Bypass and Disable EDR Protection

Modern attackers employ increasingly sophisticated techniques to bypass EDR solutions, with several methods becoming particularly prevalent in recent campaigns.

Advanced Process Manipulation Techniques

Attackers utilize techniques like process hollowing, where they create legitimate processes, remove their content, and replace them with malicious code. As detailed in recent cybersecurity research, attackers "create a fictitious process that consumes space, pause it, modify its content to match the payload, and then restart the process with updated instructions and content." This approach allows malicious code to execute within seemingly legitimate processes, evading EDR detection mechanisms.

Similarly, reflective DLL injection allows attackers to load malicious code directly into a process's memory without writing to disk. This technique enables malware to operate without creating artifacts that traditional EDR file scanning would detect. As noted by security researchers, "reflective DLL injection dispenses with using conventional Windows APIs to load DLLs... the DLL can function without raising security alerts or drawing attention from antivirus programs."

Living Off the Land and Direct System Calls

"Living off the land" techniques involve leveraging legitimate system tools and binaries to carry out malicious activities, making it extremely difficult for EDR solutions to distinguish between legitimate and malicious operations. Attackers increasingly use trusted Windows utilities like PowerShell, WMI, and PsExec to move laterally within networks without triggering EDR alerts.

Furthermore, sophisticated attackers bypass EDR systems by making direct system calls to the kernel, circumventing the user-mode hooks that EDR solutions typically use to monitor activity. Security researchers note that "user-land hooks are used by the majority of AVs, EDRs, and sandboxes to monitor and intercept each user-land API call. They are unable to trace a technique that enters kernel mode and conducts a system call." This technique allows malware to operate below the radar of most endpoint security tools, executing malicious actions without triggering alerts.

The Akira Ransomware Attack: A Case Study in EDR Bypass

A particularly alarming example of EDR bypass occurred in a recent Akira ransomware attack that affected a major healthcare organization. This case perfectly illustrates the critical security gaps that exist in organizations relying primarily on EDR for protection.

The attack began when the Akira ransomware group exploited an unsecured webcam within the healthcare network. What makes this attack particularly noteworthy is that the initial compromise didn't involve endpoints protected by EDR software. Instead, the attackers targeted a vulnerable Linux-based webcam that couldn't run EDR agents.

After gaining initial access through a compromised remote access solution, the attackers delivered AnyDesk, exfiltrated data, and used Remote Desktop Protocol (RDP) for lateral movement. When they attempted to deliver their ransomware payload to Windows devices, the organization's EDR tool initially blocked the execution of the encryption software.

However, the attackers were undeterred. They conducted additional network scanning and discovered the vulnerable webcam. Using this device, they mounted Windows Server Message Block (SMB) network shares of the organization's devices onto the webcam and launched their Linux encryptor. Because the webcam couldn't run EDR software, this attack path completely bypassed the organization's endpoint security controls.

This attack demonstrates a critical insight: attackers don't need to defeat EDR directly—they can simply go around it by targeting devices that cannot run EDR agents. This strategy of circumventing rather than confronting security controls is becoming increasingly common in sophisticated attacks.

XDR and NDR: Enhanced but Still Insufficient

Organizations have attempted to address EDR limitations by implementing Extended Detection and Response (XDR) and Network Detection and Response (NDR) solutions. While these technologies represent improvements, they still leave critical gaps in security coverage.

The Promise and Limitations of XDR

XDR extends EDR capabilities by integrating data from multiple security products, including endpoints, networks, cloud workloads, and email. This broader visibility certainly improves threat detection capabilities. However, XDR still struggles with the fundamental challenge of detecting attackers who leverage legitimate credentials or authorized insider activities to mask their presence.

As security experts note, "XDR, for instance, attempts to integrate endpoint, network, and other data sources, but it still struggles to detect attackers who leverage legitimate credentials or authorized insider activities to mask their presence." Additionally, XDR solutions can be complex to implement and manage, requiring significant expertise and resources to operate effectively.

NDR's Visibility Challenges

NDR solutions analyze network traffic to detect anomalies and potential threats, providing visibility where EDR cannot. However, NDR often faces difficulties distinguishing legitimate internal user activity from subtle malicious movements, especially when attackers use valid, stolen credentials.

Furthermore, as more network traffic becomes encrypted, attackers can hide their activities without deploying specialized tools. While some NDR solutions offer encrypted traffic analysis, these techniques have limitations and may not catch all sophisticated attack methods. As security researchers observe, "NDR often faces difficulties discerning legitimate internal user activity from subtle malicious movements when attackers use valid, stolen credentials."

Regulatory Requirements Driving Enhanced Security

Beyond the technical imperative to secure networks comprehensively, manufacturing and healthcare organizations face growing regulatory requirements that mandate more robust security measures.

Healthcare's Evolving Security Mandates

The healthcare sector faces particularly stringent regulatory requirements. The updated HIPAA Security Rule now explicitly recommends network segmentation as a critical control for protecting electronic Protected Health Information (ePHI). Healthcare institutions must implement segmentation strategies that account for both traditional IT systems and the growing ecosystem of connected medical devices.

The U.S. Department of Health and Human Services (HHS) 405(d) Program also emphasizes the importance of network segmentation in its Health Industry Cybersecurity Practices (HICP). These guidelines specifically address the challenges of securing internet-connected medical devices and systems, recommending microsegmentation as an effective approach to limiting lateral movement and containing potential breaches.

Manufacturing's Industrial Control System Security Standards

For manufacturing organizations, the IEC 62443 standard provides critical guidance on securing industrial automation and control systems. A core component of this framework is the concept of zone and conduit models, which essentially call for comprehensive network segmentation to protect critical operational technology systems.

The standard requires organizations to identify and isolate critical control systems, implementing secure conduits for communication between zones. This approach effectively limits the potential impact of a compromised system and prevents lateral movement across the industrial network.

Zero Trust Microsegmentation: The Missing Layer of Defense

As the limitations of traditional security approaches become increasingly apparent, organizations are turning to Zero Trust frameworks to address these vulnerabilities. Zero Trust security operates on the principle of "never trust, always verify," requiring continuous authentication and authorization regardless of a user's location or network connection status.

Why Identity-Based Microsegmentation Works

At the heart of effective Zero Trust implementation is microsegmentation, a security technique that divides networks into isolated segments, each protected by defined security controls. Unlike traditional network segmentation, which typically uses VLANs and is relatively static, modern microsegmentation is dynamic and granular, capable of adapting to changing network conditions and threats.

Identity-based microsegmentation takes this approach a step further by making access decisions based on the identity of users, devices, and applications rather than just IP addresses or network locations. This approach provides several critical advantages:

1. Comprehensive Visibility: Identity-based microsegmentation provides complete visibility into all users, workloads, and devices across the network, including IoT, OT, and IoMT devices that cannot run EDR agents.

2. Containment of Lateral Movement: By implementing least-privilege access controls based on identity, microsegmentation significantly restricts an attacker's ability to move laterally through the network, even if they manage to compromise initial systems.

3. Dynamic Policy Enforcement: Modern microsegmentation solutions can adjust security policies in real-time based on observed behaviors and threat intelligence, providing adaptive protection against evolving threats.

4. Integration with Existing Security Tools: Leading microsegmentation solutions integrate with existing security investments, including EDR platforms like CrowdStrike, enhancing their effectiveness by providing network-level context and control.

Implementing a Comprehensive Security Strategy

To effectively protect against modern threats that bypass or disable EDR solutions, organizations need a comprehensive, layered security approach that addresses the people, process, compliance, and technology aspects of robust security.

People: Building Security Awareness and Expertise

The human element remains crucial in any security strategy. Organizations should invest in continuous security awareness training to help users recognize potential threats and follow secure practices. This training should focus particularly on the risks of social engineering, credential security, and the importance of following established security protocols.

Additionally, security teams need specialized training in Zero Trust principles and microsegmentation technologies to ensure proper implementation and management. Cross-functional collaboration between IT, security, operations, and compliance teams is essential to develop a holistic approach to security that addresses all aspects of the organization's infrastructure.

Process: Operationalizing Comprehensive Security

Effective security requires well-defined processes that address the full spectrum of security needs. Organizations should implement proactive threat-hunting processes that look for signs of compromise, particularly focusing on lateral movement indicators that might bypass EDR controls.

Incident response playbooks should specifically address attacks that bypass traditional security measures, including IoT/OT device compromise scenarios. Regular assessments of network architecture and security controls help identify potential gaps, particularly around devices that cannot run EDR agents.

Compliance: Meeting Regulatory Requirements

For healthcare organizations, implementing the network segmentation controls recommended in the updated HIPAA Security Rule is essential, with a particular focus on protecting ePHI across all systems. Manufacturing entities should align security measures with IEC 62443 standards for industrial control systems, implementing zone and conduit models through microsegmentation.

Comprehensive documentation of security controls and regular testing of their effectiveness is crucial for demonstrating compliance during audits. This documentation should include specific measures taken to address known vulnerabilities in devices that cannot run EDR agents.

Technology: Deploying an Integrated Security Stack

The technology component of a comprehensive security strategy should include multiple layers, with identity-based microsegmentation playing a central role in addressing the gaps left by EDR, XDR, and NDR solutions.

A robust security architecture should integrate:

• EDR/XDR Solutions: Maintain advanced endpoint protection while recognizing its limitations.
• NDR Capabilities: Deploy network detection capabilities that can analyze encrypted traffic and identify anomalous patterns.
• Identity-Based Microsegmentation: Implement microsegmentation that uses identity as the basis for access decisions, providing granular control over all network traffic.
• Integration Layer: Ensure all security tools communicate effectively, sharing threat intelligence and coordinating responses.

Key Considerations for Implementing Identity-Based Microsegmentation

For organizations looking to implement identity-based microsegmentation to address the gaps in their security architecture, several key considerations can help ensure success:

Start with Comprehensive Discovery and Visibility

Begin by gaining a complete understanding of your network environment. This includes identifying all devices, understanding communication patterns, and mapping dependencies between systems. This visibility is crucial for developing effective segmentation policies without disrupting business operations.

Many organizations discover they have significantly more devices connected to their networks than they realized. This discovery process often reveals shadow IT, forgotten legacy systems, and unmanaged IoT devices that represent potential security vulnerabilities.

Implement in Phases

Adopt a phased implementation approach, starting with critical assets and gradually expanding coverage. This approach allows you to demonstrate value quickly while minimizing potential disruption to business operations.

A typical phased approach might begin with securing critical systems that house sensitive data or control essential operations, then expand to departmental resources, and finally encompass the entire network environment.

Develop Policies Based on Least Privilege

Create microsegmentation policies based on the principle of least privilege, ensuring that users and devices have only the access they absolutely need to perform their functions. This approach minimizes the potential impact of a compromise by strictly limiting lateral movement opportunities.

Policy development should involve stakeholders from across the organization to ensure that security controls support rather than hinder business operations. Look for a microsegmentation platform that enables the simulation of new policies before they go into production. Regular reviews and updates of these policies and any use of them can be seen in a modern microsegmentation platform it can enable the team to ensure the policies remain aligned with evolving business needs and threat landscapes.

Integrate with Existing Security Investments

Ensure your microsegmentation solution integrates seamlessly with your existing security tools, including EDR platforms like CrowdStrike. This integration enhances the effectiveness of your entire security stack, providing coordinated protection across endpoints and networks.

Integration allows for the sharing of threat intelligence and coordinated response actions. For example, when an EDR solution detects suspicious activity on an endpoint, an integrated microsegmentation platform can automatically isolate that device from the network to prevent lateral movement.

Building a Resilient Security Architecture

The limitations of EDR solutions in protecting against modern threats are clear. While endpoint protection remains a critical component of any security architecture, it must be complemented by additional layers of security to address its inherent blind spots and vulnerabilities to bypass techniques.

Identity-based microsegmentation represents a powerful approach to filling these security gaps, particularly for manufacturing and healthcare organizations facing sophisticated threats and stringent regulatory requirements. By implementing comprehensive visibility, granular access controls, and dynamic policy enforcement based on identity, organizations can significantly enhance their security posture and prevent attacks that would otherwise bypass traditional security measures.

As cyber threats continue to evolve, so too must our approach to security. Moving beyond reliance on any single technology toward an integrated, defense-in-depth strategy represents the future of cybersecurity—a future where even the most sophisticated attackers face multiple layers of protection that work together to detect, prevent, and contain threats before they can cause significant damage.

By combining the strengths of EDR with the comprehensive protection of identity-based microsegmentation, organizations can build a resilient security architecture capable of withstanding even the most sophisticated attacks that attempt to bypass or disable traditional security controls. In today's threat landscape, this layered approach isn't just an option—it's an imperative for organizations committed to protecting their critical assets and operations.

Are you ready to enhance your organization's defense against lateral movement attacks and have a stronger security posture than just EDR or XDR? Contact Elisity today to learn how our identity-based microsegmentation platform can strengthen your security posture.