By the end of 2024, there were 17.7 billion active Internet of Things (IoT) devices worldwide. That number is projected to climb to 40.6 billion by 2034, growing at a compound annual rate of 9%, according to The Global IoT Forecast Report, 2024-2034. Every one of those devices, from security cameras and HVAC controllers to connected medical equipment and industrial sensors, represents a potential entry point for attackers. For managed service providers (MSPs) and IT teams, the challenge isn’t just scale; it’s the lack of standardized security, vendor fragmentation, and the reality that many IoT endpoints ship with weak or nonexistent protections.
A single compromised IoT device can be leveraged for lateral movement, ransomware deployment, or data exfiltration. Without visibility and strong controls, these devices expand the attack surface faster than traditional defenses can keep up. Remember, all a skilled attacker needs is to get into the environment.
This blog provides a technical, actionable roadmap to secure IoT devices, covering foundational best practices, advanced controls, compliance alignment, and MSP-ready strategies that reduce client risk while supporting business growth.
Key takeaways
- IoT security risks are accelerating: Billions of new devices, often deployed with default credentials and poor vendor patching, are fueling attacks.
- Network segmentation and zero trust are non-negotiable: Separating IoT traffic and enforcing least privilege access prevents lateral movement.
- Continuous visibility is essential: MSPs need automated discovery, monitoring, and behavioral analytics to detect rogue or compromised devices.
- Compliance requirements are catching up: Frameworks such as HIPAA, PCI DSS, and NIST now expect IoT-specific protections in place.
- Layered security delivers resilience: Combining RMM, XDR, SIEM, and threat intelligence enables faster detection, response, and client protection.
Understanding the IoT threat landscape
IoT adoption is exploding across industries, from healthcare and manufacturing to finance and retail. However, every new connected device adds to the attack surface, and attackers know many IoT devices lack the same security rigor as traditional IT assets. According to the ONEKEY OT & IoT Cybersecurity Report 2024, 52% of companies have already experienced a cyberattack through operational technology (OT) or IoT devices, showing that IoT exploitation is a widespread and current issue.
Common IoT attack vectors
- Default credentials and weak authentication: Many devices still ship with factory-set usernames and passwords that are rarely updated. Attackers exploit these to gain instant access.
- Unpatched firmware vulnerabilities: IoT vendors often release firmware updates slowly, or not at all, leaving devices exposed to known exploits.
- Shadow IoT devices: Employees connecting unauthorized smart devices to corporate networks create unmanaged entry points outside IT’s visibility.
- Insecure APIs and communication protocols: Poorly secured web interfaces or weak encryption make it easy for adversaries to intercept or manipulate data.
Real-world impact of IoT vulnerabilities
- The Mirai botnet exploited default passwords on IoT devices to launch some of the largest distributed denial of service (DDoS) attacks in history.
- In healthcare, vulnerable connected medical devices have been exploited to disrupt patient care and threaten safety. Can you imagine what damage can be done with a compromised insulin pump?
- Industrial IoT (IIoT) devices have been targeted to halt operations, compromise physical safety, and extort organizations with ransomware.
For MSPs, the risk is multiplied across clients. A single compromised device can act as a backdoor, enabling attackers to move laterally across the network, harvest credentials, and launch large-scale attacks. Understanding these risks is the first step to designing a security strategy that addresses IoT on a large scale.
Core IoT security challenges for MSPs and IT teams
Managing IoT security across client environments introduces unique challenges that traditional IT security tools aren’t built to handle.
- Fragmented vendor ecosystem: With thousands of manufacturers, firmware versions, and protocols, consistency in applying security standards is nearly impossible.
- Limited visibility: IoT devices often connect without IT approval, creating blind spots that attackers exploit.
- Weak authentication models: Many devices don’t support multi-factor authentication (MFA), making them easier targets.
- Firmware vulnerabilities: Patch releases are inconsistent, leaving devices exposed to known exploits for extended periods.
- Scalability of defense: MSPs managing multiple clients struggle to maintain IoT patching, monitoring, and response at scale.
- Compliance risks: Frameworks such as HIPAA and PCI DSS increasingly include IoT security requirements, exposing MSPs and clients to fines or legal risk if gaps persist.
- Unencrypted connections: Certain alarm systems are prone to replay attacks and signal jammers on door and window sensors, rendering alerts undetectable by base stations.
Addressing these challenges requires a strategy built on visibility, segmentation, and automation, and backed by tools that integrate IoT monitoring into broader security workflows.
Foundational IoT security best practices
IoT security starts with building strong fundamentals. Without these measures in place, advanced defenses such as extended detection and response (XDR) or AI-driven analytics won’t deliver their full value. For MSPs, standardizing these practices across client environments is key to reducing risk and meeting compliance obligations.
1. Asset discovery and inventory
According to Dr. Eric Cole of SANS, “Prevention is ideal, but detection is a must.” You can’t secure what you can’t see. MSPs need automated scanning tools that continuously discover, classify, and inventory every connected IoT device. This ensures rogue or shadow devices are quickly identified and placed under management.
2. Network segmentation
IoT traffic should never run unmonitored on the same network as critical systems. By isolating IoT devices into dedicated VLANs or micro-segments, you limit attackers’ ability to move laterally if a device is compromised. Additionally, OT and industrial control system (ICS) devices/networks should operate independently of any IT-based network.
3. Zero trust enforcement
The principle of least privilege is not a novel concept. It has been around since the mid-1970s. It was originally created for users; however, devices are no exception. Every IoT device must be treated as untrusted by default. Implement device identity verification, strict access controls, and least privilege rules so devices only interact with the systems they need to function.
4. Strong encryption protocols
Encrypt IoT communications end-to-end. TLS, WPA3 for wireless traffic, and VPN tunneling are essential for preventing man-in-the-middle attacks or data interception.
5. Secure configuration management
Default settings are a gift to attackers. MSPs should turn off unnecessary services, close unused ports, and replace factory-set credentials with unique, complex alternatives. Standardizing these configurations across clients reduces exposure significantly.
Establishing these practices creates a secure foundation, making it far harder for attackers to exploit the vulnerabilities IoT devices are notorious for.
Advanced IoT security controls for 2026
Once the foundational defenses are in place, MSPs and IT teams can strengthen client resilience with advanced security measures tailored to the unique behavior and risks of IoT ecosystems.
AI-driven anomaly detection
Traditional monitoring often misses IoT-specific threats. AI and machine learning models can baseline device behavior, such as traffic patterns, connection frequency, and data flow, and trigger alerts when deviations suggest compromise or rogue activity.
XDR integration for cross-device correlation
IoT threats rarely stay isolated. XDR consolidates data from IoT endpoints, servers, and user devices, allowing security teams to correlate events across the entire environment and identify sophisticated, multi-vector attacks.
Automated patch orchestration
Manual firmware updates across dozens of vendors and device types are impractical and time-consuming. Automated patch orchestration ensures updates are applied as soon as they’re released, minimizing the window of vulnerability without overburdening IT staff.
Behavioral analytics
Signature-based detection alone is not enough. Attackers know all too well how to circumvent these methods. Instead, behavioral analytics monitors device actions in real time to identify suspicious activities, such as a thermostat attempting to access sensitive databases or a camera transmitting data to an unknown external server.
Threat intelligence integration
MSPs benefit from threat feeds tailored to IoT vulnerabilities, enabling proactive defenses against known exploits. Integrating IoT-specific threat intelligence with security information and event management (SIEM) or XDR solutions allows faster detection and prioritization of remediation.
These advanced controls not only strengthen defenses but also create the visibility and automation necessary to scale IoT security across multiple client environments.
Compliance and regulatory alignment
As IoT adoption accelerates, regulators are tightening expectations. MSPs managing client environments must account for IoT-specific risks within broader compliance frameworks to avoid fines, legal exposure, and reputational damage.
Mapping IoT to established frameworks
- NIST Cybersecurity Framework (CSF): Calls for continuous monitoring, risk assessment, and access control that extend to IoT endpoints.
- ISO/IEC 27001: Requires secure configuration and risk management processes, which directly apply to IoT devices.
- HIPAA: Connected medical devices transmitting patient data fall under protected health information (PHI) safeguards.
- PCI DSS: Any IoT device handling or transmitting cardholder data must follow strict encryption and access controls.
Logging and audit readiness
IoT devices often lack robust logging, but MSPs can centralize event data into SIEM or XDR systems for compliance reporting. This provides visibility into device activity, supports forensic investigations, and demonstrates due diligence during audits.
Client accountability
MSPs play a critical role in ensuring clients understand that IoT devices are not exempt from compliance. Contracts and service agreements should outline shared responsibility for patching, monitoring, and secure configuration.
Emerging regulations
Governments are introducing IoT-specific laws, such as the US IoT Cybersecurity Improvement Act and the EU Cyber Resilience Act, which establish minimum security requirements for connected devices. Staying ahead of these standards positions MSPs as trusted advisors.
Aligning IoT controls with compliance requirements not only reduces risk but also creates a competitive edge for MSPs offering security-as-a-service.
Building an MSP-ready IoT security strategy
For MSPs, IoT security isn’t just about locking down a single environment; it’s about applying consistent, scalable protections across dozens or even hundreds of client networks. That requires a strategy that blends visibility, automation, and integration into broader security workflows.
Extend RMM capabilities to IoT endpoints
Remote monitoring and management (RMM) solutions, such as ConnectWise RMM™, provide continuous monitoring, patch management, and alerts for all managed devices. By extending RMM capabilities to IoT, MSPs gain a unified inventory that captures everything on the network, reducing blind spots that attackers exploit.
Integrate IoT into SOC workflows
IoT telemetry should feed directly into security operations center (SOC) operations through SIEM and XDR solutions. SIEM offerings, such as ConnectWise SIEM™, and managed detection and response (MDR) services, such as ConnectWise MDR™, allow MSPs to correlate IoT activity with user and server logs, enabling faster detection of anomalies and multi-vector attacks across client environments.
Centralize management within the ConnectWise Asio® platform experience
Because IoT risks touch nearly every layer of client infrastructure, managing them in silos is inefficient. The ConnectWise Asio platform unifies RMM, SIEM, and SOC workflows, giving MSPs the visibility and automation needed to scale IoT security without adding complexity. This minimizes portal fatigue (having to monitor multiple portals at once), which is a common pain point among MSPs.
Real-world example
Consider a client network with hundreds of connected cameras, sensors, and access control systems. By segmenting traffic, using an RMM solution to track patching, and correlating logs with a SIEM solution, MSPs can drastically reduce compromise risk, accelerate incident response, and prove compliance during audits.
Delivering IoT security as part of a broader managed services offering, backed by integrated tools such as ConnectWise RMM, ConnectWise SIEM, and ConnectWise MDR, strengthens client trust and positions MSPs as forward-thinking partners in a rapidly expanding IoT ecosystem.
Conclusion
The surge in IoT adoption presents both opportunity and risk for MSPs and IT teams. With billions of new devices coming online, every unsecured endpoint represents a potential breach, compliance violation, or service disruption. Building resilience starts with foundational best practices—asset discovery, segmentation, zero trust, encryption, and secure configuration—then expands into advanced controls such as AI-driven detection, XDR integration, and threat intelligence.
MSPs that leverage RMM solutions, such as ConnectWise RMM, and security tools, such as ConnectWise SIEM and ConnectWise MDR, can deliver scalable IoT security that aligns with compliance requirements and reduces client risk. Centralizing these efforts through the ConnectWise Asio platform enables visibility and automation across diverse device ecosystems without adding operational burden.
As IoT ecosystems grow more complex, clients will look for MSPs that can simplify security while ensuring compliance and uptime. By mastering IoT security now, MSPs gain a competitive edge and position themselves as trusted advisors in safeguarding the connected future.
