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What is IoT Security?
IoT security protects network-connected physical devices from compromise and misuse. Learn why IoT devices are uniquely vulnerable, what attacks target them, and how network segmentation provides the primary defense.
What IoT Security Addresses
IoT devices present security challenges that traditional IT security frameworks do not adequately address. Many IoT devices cannot run security agents — they lack the CPU and memory required for endpoint protection software. Many run proprietary firmware that cannot be patched through standard enterprise patch management processes — firmware updates require vendor-provided patches and device-specific update mechanisms. Many use default credentials that users do not change and that are publicly documented in vendor manuals. And many communicate using protocols — MQTT, CoAP, Modbus, BACnet — that enterprise network security tools do not inspect.
IoT Attack Scenarios
Botnet recruitment is the most common IoT attack: Mirai and its derivatives scan for IoT devices using default credentials and compromise them for DDoS attack infrastructure. Medical device attacks target insulin pumps, pacemakers, and infusion systems — devices with documented vulnerabilities that could enable patient harm through remote manipulation. Building automation attacks target HVAC, physical access, and lighting systems that have been connected to corporate networks for remote management without adequate security isolation.
IoT Security Controls
Network segmentation that isolates IoT devices from corporate IT networks is the primary IoT security control. An IoT device that has been compromised cannot reach corporate systems if firewall rules prevent communication between the IoT segment and the corporate network. This requires knowing what IoT devices are deployed and where — an asset inventory challenge that is often more complex than expected in facilities with large numbers of embedded systems.
Default credential changes should be mandatory for all IoT device deployments. Network access control systems can block devices that have not had credentials changed from accessing corporate infrastructure. Firmware update programs keep IoT devices current with vendor-provided security patches. Network monitoring specifically for IoT traffic anomalies — devices communicating with unexpected external destinations, unusual volumes of outbound traffic — provides detection capability for compromised IoT devices.
IoT in PE Portfolio Companies
Manufacturing, healthcare, retail, and building management portfolio companies have significant IoT device populations. Assessing IoT security requires device inventory (often revealing devices IT was unaware of), network topology analysis to evaluate segmentation, and firmware version review to identify devices running vulnerable software. IoT security is a standard component of Cloudskope's M&A due diligence for industrial and healthcare acquisitions.
Real-World Example: Verkada Camera Breach 2021 — IoT at Enterprise Scale
In March 2021, hackers accessed the video feeds and administrative systems of Verkada, a cloud-based security camera company, gaining access to approximately 150,000 cameras deployed in hospitals, schools, police departments, prisons, and corporate offices including Tesla and Cloudflare. The attackers gained access through an exposed administrator account, then used that access to reach individual camera feeds. The breach illustrated that IoT security failures affect not only the device owner but every individual captured by those devices — patients in hospital wards, detainees in jails, employees in corporate offices.
Of enterprise IoT devices run firmware that has not been updated in over 12 months — with known, unpatched vulnerabilities that make them prime targets for attacker recruitment into botnets or as lateral movement pivot points.