IoT data protection has become an urgent priority for businesses in 2025, as billions of connected devices flood networks and create unprecedented security risks. The Internet of Things (IoT) has revolutionized operations, empowering organizations to collect real-time insights, automate processes, and deliver connected experiences. However, with this rapid adoption comes a massive surge in vulnerabilities, ranging from unpatched firmware to weak authentication and a lack of visibility. In 2025, 84% of the companies that had adopted IoT reported security breaches.
For managed service providers (MSPs) and IT departments, securing IoT ecosystems is a strategic imperative. Of the nearly 60% of organizations worldwide that use IoT solutions, 43% still require a system to protect their infrastructure. As the provider on the front lines, MSPs and IT teams are tasked with protecting both the devices and the sensitive data they process and transmit. The challenge lies in balancing security, compliance, and operational efficiency across various environments.
This blog will guide you through the current state of IoT security, the core pillars of robust IoT data protection, and a roadmap to secure your infrastructure while enhancing protection value.
Key takeaways
- IoT data protection is mission-critical for MSPs and IT service providers as the number of connected devices and associated threats continues to surge.
- Unpatched firmware, weak credentials, and poor network segmentation are the top drivers of IoT-related breaches, costing organizations hundreds of thousands of dollars per incident.
- Core protection pillars include device visibility, secure configuration, encryption, centralized monitoring, and regulatory alignment.
- MSPs and IT professionals are uniquely positioned to lead IoT security initiatives, thanks to their deep knowledge of infrastructure, operational automation, and compliance expertise.
- A structured roadmap helps deliver consistent, scalable IoT protection while building trust and recurring revenue for MSPs.
What is IoT data protection?
IoT data protection refers to the strategies, technologies, and best practices used to safeguard the information generated, transmitted, and stored by IoT devices. These devices range from smart thermostats and security cameras to industrial sensors and medical equipment, constantly collecting and sharing data, often in real-time.
Because IoT devices are designed for connectivity, they can introduce vulnerabilities that traditional IT assets don’t. Protecting the data they handle means addressing three core aspects:
- Data confidentiality: Ensuring that only authorized users or systems can access the information generated by IoT devices, typically through encryption and authentication controls.
- Data integrity: Preventing unauthorized changes or tampering with the data, whether during transmission or while stored.
- Data availability: Maintaining continuous and reliable access to IoT data for authorized users and systems, even in the face of cyberattacks and device failures.
Of course, IoT data protection isn’t limited to technical safeguards. It also involves implementing governance policies, compliance measures, and continuous monitoring to ensure that clients can fully leverage the benefits of IoT without exposing themselves to unnecessary risks.
Why IoT data protection matters
The IoT landscape is exploding. The total number of connected devices worldwide is expected to reach approximately 75 billion by the end of 2025, comprising integrated technologies such as smart devices, smart buildings, smart vehicles, and embedded objects, including electronics and network connections. The surge is transforming industries, from healthcare and manufacturing to retail and finance, but it’s also multiplying attack surfaces at a staggering rate.
Consider these statistics:
- 67% of organizations experienced at least one IoT-related security incident in the past year.
- One in three data breaches now involves an IoT device.
- The average cost of an IoT-related data breach in 2025 is $357,000, with enterprise cases exceeding $1.8 million.
The risks are clear:
- Unpatched firmware vulnerabilities account for more than 60% of breaches.
- Default or weak credentials continue to be a significant entry point for attackers.
- Lack of network segmentation means that a compromised smart camera can quickly become a gateway into critical infrastructure.
For MSPs and IT service providers, these numbers represent opportunities to deliver measurable value. The ability to safeguard IoT ecosystems directly translates into strong stakeholder relationships and competitive differentiation.
You hold a unique advantage in the IoT security landscape:
- Comprehensive infrastructure insight: You already understand your client’s or company’s networks and can uncover hidden IoT risks.
- Operational frameworks: Managed services models are inherently suited to automation, continuous monitoring, and proactive response.
- Compliance expertise: You can help guide users through complex requirements, turning regulatory hurdles into competitive strengths.
The seven pillars of robust IoT data protection
1. Visibility and inventory
You can’t protect what you can’t see. Many businesses underestimate the number of IoT devices connected to their networks, including shadow IoT devices, which have been installed without IT or MSP knowledge.
Best practices:
- Deploy continuous device discovery tools to map all connected endpoints.
- Maintain a real-time inventory with device type, location, firmware version, and security status.
- Classify devices by criticality and exposure to prioritize protection efforts.
2. Device hardening and secure configuration
The quickest win in IoT data protection often comes from eliminating low-hanging fruit, such as default passwords and insecure settings.
Best practices:
- Replace default credentials with strong, unique passwords and multi-factor authentication (MFA).
- Apply secure configurations aligned with industry benchmarks and standards.
- Automate patch management or enforce a patch management schedule for firmware and software updates to ensure all systems remain up to date.
3. Network segmentation and edge protection
IoT devices should never have unrestricted access to the same network segment as critical business systems. Network segmentation helps minimize the blast radius of threats.
Best practices:
- Create dedicated virtual local area networks (VLANs) or subnets for IoT devices to improve network security and performance by isolating them from the main network.
- Implement zero trust network access (ZTNA) controls to continuously verify every user, device, and application before granting access, regardless of the network location.
- Use firewalls and intrusion prevention systems at the network edge to inspect and filter IoT traffic.
- Edge computing can improve both performance and security by processing data locally rather than sending it all to the cloud.
4. Encryption and secure communication
Data encryption remains underutilized in IoT, despite its critical importance. Without it, sensitive information can be intercepted in transit or stolen from storage.
Best practices:
- Encrypt data both in transit (TLS/SSL) and at rest.
- Use secure, standardized communication protocols, such as MQTT with TLS, which is ideal for IoT devices.
- Implement mutual authentication between devices and servers to prevent spoofing.
5. Cloud backup and SaaS data recovery
IoT ecosystems often rely on cloud productivity services to store, process, and share device-generated data. When this information is lost due to accidental deletion, configuration errors, ransomware, or SaaS application failures, availability is directly impacted. Establishing resilient backup and recovery processes ensures that critical data can be restored quickly and accurately.
Best practices:
- Protect SaaS data stored in services such as Microsoft 365 and Google Workspace to maintain the integrity and availability of IoT-related workflows.
- Ensure backups encrypt data in transit and at rest to strengthen confidentiality and prevent interception or tampering.
- Use solutions that provide granular, point-in-time recovery to minimize disruption and restore only what is needed.
- Validate backup retention policies and recovery procedures regularly to support compliance and maintain resilience across cloud environments.
6. Centralized management and AI-driven monitoring
Managing IoT security at scale requires centralized visibility and automation to ensure seamless operation. Without it, patching, monitoring, and compliance can quickly become overwhelming.
Best practices:
- Use a unified dashboard to monitor device health, firmware status, and security alerts.
- Leverage artificial intelligence (AI) and machine learning (ML) for anomaly detection that flags unusual device behaviors in real time.
- Automate repetitive tasks, such as firmware deployment, backup management, and security policy enforcement, to free technicians for higher-value tasks.
7. Compliance and regulatory alignment
Global regulations are tightening, and IoT security is squarely in the spotlight. MSPs and IT pros who stay ahead of these shifts can offer services to support compliance and also strategic foresight.
Frameworks to watch:
- EU Data Act (effective September 2025): Mandates data access rights and portability for IoT manufacturers and cloud providers.
- US Cyber Trust Mark: A new certification for smart devices that signals strong security practices to consumers and businesses.
Existing frameworks, such as the GDPR, HIPAA, and CCPA, continue to apply when IoT devices handle personal or sensitive health data.
IoT data protection with ConnectWise
Securing IoT environments at scale requires visibility, automation, and the ability to act quickly when threats arise. ConnectWise offers MSPs and IT providers an integrated solution designed to simplify and enhance IoT data protection across diverse networks.
With ConnectWise RMM, you can segment IoT devices from critical systems to contain potential breaches and reduce attack surfaces. It also gives you the ability to monitor device activity in real time with AI-driven analytics to detect discrepancies and suspicious behavior.
Combining centralized management with intelligent automation through ConnectWise enables you to protect sensitive IoT data without adding operational complexity. This not only strengthens your security stance but also positions your services as proactive and trusted for IoT data protection.
See a live demo or request a quote to learn more about how ConnectWise can help you deliver secure, scalable IoT data protection for every environment you serve.
