What is lateral movement and why is it so dangerous?

Lateral movement happens when an attacker who gains access to one device or account starts moving across the network to find more valuable targets. Once inside, they use legitimate credentials, remote desktop tools and internal traffic patterns to blend in, making detection extremely difficult.

According to IBM’s Cost of a Data Breach report in 2024, it takes organisations an average of 204 days to detect a breach and lateral movement is one of the main reasons. Attackers use this time to explore, escalate privileges and exfiltrate data, often triggering multiple simultaneous compromises before anyone realises.

For MSPs, the risk is multiplied. A single compromised endpoint in one client’s environment can become a gateway to others if networks, identities or shared admin credentials are not properly isolated.

How do attackers perform lateral movement?

Attackers rarely stay where they start. After the initial foothold (through phishing, credential theft or exploiting an unpatched system) they pivot inside the environment using a variety of techniques:

• Credential harvesting: Stealing cached passwords, tokens or hashes from compromised devices.

• Pass-the-hash / pass-the-ticket: Reusing stolen authentication material to impersonate legitimate users.

• Remote execution: Using RDP, SMB, PowerShell or WMI to move laterally.

• Privilege escalation: Exploiting vulnerabilities or misconfigurations to gain domain admin rights.

• Data staging and exfiltration: Collecting and preparing data for theft once high-value systems are accessed.

These techniques exploit legitimate tools and permissions, making them hard to spot with traditional antivirus or endpoint-only protection.

What makes lateral movement so hard for MSPs to detect?

Most MSPs monitor endpoints or firewalls separately, but lateral movement often takes place in the gaps between tools, inside identity systems, east-west network traffic or cloud permissions.

Without unified visibility, detection depends on luck or user reports.

Common challenges include:

• Siloed tools that can’t correlate identity, endpoint and network events.

• Alert fatigue, where meaningful patterns get buried under noise.

• Lack of continuous telemetry across hybrid or multi-tenant environments.

• Limited context when using standalone SIEM or EDR tools.

This visibility gap allows attackers to move quietly while MSPs believe their defences are working.

What are the business impacts of lateral movement?

Lateral movement turns small incidents into full-scale crises. The consequences include:

• Ransomware propagation across multiple systems or clients.

• Data theft from critical servers or shared cloud storage.

• Regulatory exposure under GDPR, NIS2 or HIPAA.

• Client churn from perceived failure in security service delivery.

• Operational disruption during lengthy incident containment and recovery.

For MSPs, even one public breach can damage reputation across their customer base. Clients trust MSPs to prevent exactly this kind of escalation.

How can MSPs detect and stop lateral movement early?

To protect clients effectively, MSPs need continuous, correlated visibility across endpoints, users and networks. The key controls include:

1. Identity monitoring and anomaly detection
   Watch for suspicious logins, privilege escalations or authentication anomalies across on-prem and cloud systems.

2. Network segmentation and access control
   Limit what each user or device can reach. Micro-segmentation stops attackers from easily pivoting once inside.

3. Endpoint detection and response (EDR)
   Detect malicious use of legitimate tools like PowerShell or WMI – early indicators of lateral movement that traditional EDRs often miss.

4. Centralised correlation and Open XDR
   Combine data from all sources into a single platform that automatically links related events, revealing movement patterns traditional tools miss.

5. Threat hunting and continuous analysis
   Managed SOC analysts can proactively search for signs of lateral movement before damage occurs.

Together, these controls reduce attacker dwell time from months to minutes and turn fragmented signals into a single, actionable picture.

How enhanced.io helps MSPs prevent lateral movement

Built on Stellar Cyber’s Open XDR foundation, enhanced.io adds managed expertise, automation, and reporting designed for MSP scale, delivering enterprise-grade protection without enterprise-level complexity.

Here’s how it works:

• Unified visibility
  All telemetry (from endpoints, identities, networks and cloud environments) is ingested into one pane of glass.

• Automated correlation
  AI-driven analytics connect suspicious behaviours across multiple devices or users, revealing attacker movement instantly.

• Fractional security director guidance
  Each MSP partner receives expert support to interpret findings, remediate risks and demonstrate value to clients.

• Audit-ready reporting
  Continuous evidence of detection and response activity helps meet compliance standards such as NIS2 and ISO 27001.

• Bring-your-own-stack integration
  Works with existing tools, meaning MSPs can upgrade visibility without displacing their current investments.

Multi-tenant by design, enhanced.io lets MSPs manage every client environment from one pane of glass without rebuilding their stack. This approach turns lateral movement from an invisible threat into a measurable, manageable security outcome.

What results can MSPs expect from a managed Open XDR approach?

When MSPs deploy enhanced.io’s managed Open XDR platform, they gain:

• Reduced detection time – attacks that once went unnoticed for months are flagged within minutes.

• Simplified operations – no need to hire or train in-house SOC analysts.

• Higher client confidence – clients see clear, ongoing evidence of protection.

• Stronger margins – partners can offer premium, scalable cybersecurity services with predictable costs.

In a recent deployment, an MSP using enhanced.io detected credential reuse and internal network scanning across multiple tenants. The Open XDR platform correlated these activities in real time, isolating the affected accounts before data could be exfiltrated, proving immediate ROI and reinforcing trust with their clients.

Endpoint tools detect infection. Open XDR detects what happens next.

Checklist: how to stop lateral movement

✅ Correlate telemetry across endpoints, networks and identities

✅ Monitor privileged account use continuously

✅ Segment internal networks to reduce lateral access

✅ Automate detection of east-west traffic anomalies

✅ Regularly test incident response workflows

✅ Partner with a managed SOC that specialises in Open XDR

When every layer reports into one view, attackers have nowhere left to hide. So by following these steps, MSPs can transform lateral movement from an undetected risk into a controlled and reportable event.

Lateral movement is the hidden threat MSPs can now control

Lateral movement thrives on blind spots. Attackers depend on the fact that most MSPs manage isolated tools with no unified view. But with enhanced.io’s managed Open XDR service, those blind spots disappear.

MSPs gain the power to see, stop and report every stage of an attack, protecting clients, proving value and growing their cybersecurity offering with confidence. With full-spectrum visibility and managed Open XDR delivery, MSPs finally have the same depth of protection as enterprise SOCs, without the complexity or cost.