IoT Security Market

How Fast Is the IoT Security Market Growing?

The global IoT security market size is expected to be valued at US$ 21.40 billion in 2026 and projected to reach US$ 66.60 billion by 2033, growing at a CAGR of 17.6% between 2026 and 2033.

Between 2020 and 2025, the market grew at a CAGR of about 19.5%, as billions of connected devices entered homes, factories, hospitals, and cities, and high-profile attacks on pipelines, hospitals, and water systems showed the damage that weak device security can cause. IoT security protects connected devices, the networks they use, and the data they send. Three factors now drive growth: the rapid rise in connected devices, new rules such as the European Union Cyber Resilience Act that require IoT device security by design, and the convergence of IT and operational technology security in industry. The market is shifting toward agentless asset visibility platforms that find every device on a network, zero trust access for devices, and AI-based threat detection. In December 2025, ServiceNow agreed to acquire Armis for about US$ 7.75 billion, showing the strategic value of device visibility and exposure management.

• By Component: Solutions held 64.0% share in 2026, while Services are projected to expand at an 18.9% CAGR through 2033, driven by managed security, consulting, and compliance support for firms lacking IoT security skills.
• By Security Type: Network Security held 35.0% share in 2026, while Cloud Security is projected to expand at a 20.1% CAGR through 2033, driven by cloud-managed IoT platforms and data moving from devices to cloud services.
• By End Use: Manufacturing held 24.0% share in 2026, while Healthcare is projected to expand at a 19.8% CAGR through 2033, driven by connected medical devices and ransomware attacks on hospitals.
• By Region: North America held 37.0% share in 2026, while Asia Pacific is projected to expand at a 20.3% CAGR through 2033, driven by smart manufacturing and smart cities in China, India, Japan, and South Korea.

Two drivers carry the strongest influence on IoT security demand during the forecast period.

Device Growth and Rising Attacks Are Driving the IoT Security Market

The rapid growth of connected devices and rising attacks are the strongest driver of the IoT security market. Every new device is a possible entry point for attackers.

The mechanism is the expanding attack surface. Tens of billions of devices, including cameras, sensors, smart meters, medical devices, industrial controllers, and vehicles, are now connected. Many run old software, use default passwords, and cannot be patched easily. Attackers use weak devices to build botnets, steal data, or move into corporate networks. Ransomware gangs target factories and hospitals, where downtime is extremely costly. State-backed groups target power grids, water systems, and telecom networks. Security teams often do not know how many devices they have, so asset visibility is the first need. Insurers now ask about device security before writing cyber policies. This growing threat keeps budgets rising.

New Regulations Are Expanding the IoT Security Market

New regulations requiring secure devices are expanding the IoT security market. Governments now set rules for device makers and operators.

The cause is policy response to rising risks. The European Union Cyber Resilience Act, which entered into force in December 2024, requires manufacturers to build IoT device security into products, fix vulnerabilities, and report incidents, with main obligations applying from 2027. The United Kingdom banned default passwords on consumer devices from 2024. The U.S. Federal Communications Commission launched the U.S. Cyber Trust Mark labeling program in January 2025. Rules for critical infrastructure, medical devices, and connected vehicles add requirements for operators. These rules push device makers and users to buy security tools, testing, and services. Compliance deadlines create predictable demand for testing, monitoring, and vulnerability management tools.

Two restraints limit how quickly the IoT security market grows.

Device Diversity Slows the IoT Security Market

Device diversity and limited computing resources slow the IoT security market. Securing many different devices is technically hard.

The specific causes are fragmented hardware and long lifecycles. IoT devices use many operating systems, chips, and communication protocols, so no single tool fits all. Many devices have small processors and batteries that cannot run security software. Industrial equipment may run for twenty years or more and often cannot be shut down for patches without stopping production. Device makers in low-cost markets often skip security to save money. Older devices may no longer receive updates. Security teams must rely on network monitoring instead of protecting devices directly. These limits make IoT security more complex and costly than traditional IT security. Vendors must support many protocols and build large libraries of device profiles.

Skills Gaps Restrict the IoT Security Market

Skills shortages and cost pressure restrict the IoT security market. Many organizations lack people who understand both IT and industrial systems.

The underlying causes are talent shortages and budget limits. Operational technology security requires knowledge of industrial processes, safety systems, and specialized protocols, which few security staff have. IT and engineering teams often work separately and disagree on priorities. Small manufacturers, hospitals, and municipalities have limited security budgets and staff. Some device makers resist the cost of meeting new rules. Return on investment can be hard to prove until a serious attack happens. Integration with existing security tools adds work. These factors slow adoption, especially among smaller organizations and in developing countries. Vendors respond with managed services, simpler dashboards, and training programs that help IT and engineering teams work together.

Industrial and Critical Infrastructure Security Opens a Fast-Growth Revenue Pool

Industrial and critical infrastructure security opens a fast-growth revenue pool in the IoT security market. Factories, utilities, and transport systems need stronger protection.

Vendors with operational technology security expertise can capture this opportunity. Smart factories connect machines, robots, and sensors to cloud systems, increasing exposure. Utilities modernize grids with smart meters and remote controls. Governments fund critical infrastructure protection and require incident reporting. Mitsubishi Electric agreed to acquire Nozomi Networks in September 2025 for about US$ 1 billion, combining industrial equipment with OT security. Claroty, Nozomi Networks, Dragos, and Fortinet offer industrial platforms. Vendors that pair visibility, threat detection, and secure remote access can win large contracts. Funding for grid and water system security in the United States and Europe adds further demand.

Medical Device and Connected Vehicle Security Creates a Specialist Revenue Pool

Medical device and connected vehicle security creates a specialist revenue pool in the IoT security market. Both areas involve safety and strict rules.

Specialist vendors and device makers can capture this opportunity. Hospitals run thousands of connected devices, from infusion pumps to imaging systems, and many run outdated software. The U.S. Food and Drug Administration requires cybersecurity plans in new medical device submissions. Connected vehicles must meet cybersecurity rules under United Nations vehicle regulations adopted in Europe, Japan, and South Korea. Zero trust network access and device monitoring protect these systems. Vendors that combine device testing, monitoring, and compliance reporting can grow. Car makers need security across vehicle software updates, charging stations, and fleet systems. Hospitals increasingly buy specialist platforms that identify every medical device and its risks.

• By Component: Solutions Lead While Services Grow Fastest

Solutions held 64.0% share in 2026. This group includes asset visibility platforms, network firewalls, endpoint protection, identity and access management, encryption, and threat detection software. Cisco Systems, Palo Alto Networks, Microsoft, Fortinet, Armis, and Forescout offer leading solutions that discover, classify, and protect devices.

Services are the fastest-growing component, expanding at an 18.9% CAGR through 2033. Organizations buy managed detection and response, risk assessments, penetration testing, compliance support, and integration services. Device makers hire testing firms to prepare for the European Union Cyber Resilience Act. Managed services help smaller organizations without in-house skills. For the market, services growth creates recurring revenue and deepens customer relationships with operators and device makers.

• By Security Type: Network Security Leads While Cloud Security Grows Fastest

Network Security held 35.0% share in 2026. Most IoT devices cannot run security software, so organizations protect them through network segmentation, firewalls, and traffic monitoring. Agentless tools watch network traffic to identify devices and detect unusual behavior.

Cloud Security is the fastest-growing security type, expanding at a 20.1% CAGR through 2033. IoT platforms send device data to cloud services for analysis and control, and cloud-managed security tools protect these flows. Endpoint security protects capable devices such as gateways and vehicles, while application security protects IoT apps and firmware. Zero trust principles link all types by verifying every device. For the market, cloud security growth follows the shift of IoT management to the cloud and to edge platforms.

• By End Use: Manufacturing Leads While Healthcare Grows Fastest

Manufacturing held 24.0% share in 2026. Factories connect machines, robots, and control systems, and ransomware attacks on manufacturers have caused major shutdowns. Operational technology security spending is rising as plants modernize.

Healthcare is the fastest-growing end use, expanding at a 19.8% CAGR through 2033. Hospitals face ransomware and rely on connected medical devices that are hard to patch. Energy and utilities, automotive, transportation, and consumer electronics are other major end uses. Smart home devices need IoT device security under new labeling rules. For the market, healthcare growth adds demand for specialist medical device monitoring platforms and services. Energy and utilities buyers focus on grid protection, while automotive buyers secure vehicle software and charging networks. Asset visibility is usually the first purchase in every end use.

• Which Region Is Leading the IoT Security Market?

North America is leading the IoT security market with a 37.0% share in 2026. The United States has the largest cybersecurity industry, high IoT adoption in factories, hospitals, and cities, and strong government focus on critical infrastructure. Cisco Systems, Palo Alto Networks, Microsoft, Fortinet, Forescout, and Claroty are major players. The U.S. Cyber Trust Mark and medical device rules support demand. Canada adds utility and healthcare demand. Federal agencies and utilities receive funding to secure critical systems. Key barriers include skills shortages and complex legacy systems. One change shaping the region is exposure management platforms that combine asset visibility with IT workflows.

• Europe Builds the IoT Security Market Through Regulation

Europe is a major IoT security market, ranking second globally. The European Union Cyber Resilience Act and the NIS2 Directive require device makers and critical operators to strengthen security. Germany, the United Kingdom, France, the Netherlands, and Italy have large industrial bases. Siemens, Thales, and Infineon Technologies supply secure hardware and services. Utilities, rail operators, and hospitals are investing in operational technology security to meet NIS2 obligations. Key barriers include compliance costs for small device makers and shortages of skilled staff. One opportunity is device testing and certification services that help manufacturers prove IoT device security before selling in the region.

• Which Region Is Growing Fastest in the IoT Security Market?

Asia Pacific is growing fastest in the IoT security market at a 20.3% CAGR through 2033. China has the largest number of connected devices and smart factories, while India is building smart cities and digital infrastructure. Japan and South Korea lead in connected vehicles and electronics. Singapore runs a cybersecurity labeling scheme for IoT devices. Trend Micro in Japan and Mitsubishi Electric are key players. Australia has strong critical infrastructure rules. Key barriers include fragmented rules across countries and price pressure from local vendors. One change shaping the region is device labeling programs, which set baseline security for consumer devices sold in several countries.

• Latin America Grows the IoT Security Market Through Infrastructure Protection

Latin America is a growing IoT security market. Brazil and Mexico have large manufacturing, energy, and telecom sectors adopting IoT, and ransomware attacks have hit government agencies and companies in the region. Chile and Colombia are modernizing utilities. Smart meter rollouts and connected oil and gas operations in Brazil and Mexico expand the attack surface, while banks and retailers use connected payment and camera systems. Governments are updating cybersecurity strategies and data protection laws. Key barriers include limited budgets and shortages of skilled security staff. One opportunity is managed security services that give mid-sized firms monitoring and asset visibility without large teams.

• Middle East & Africa Expands the IoT Security Market Through Smart Cities

Middle East & Africa is an emerging IoT security market. Saudi Arabia and the United Arab Emirates are building smart cities and digitizing oil, gas, and utilities, which raises security needs. Israel has many IoT security vendors. South Africa protects mining and utilities. National cybersecurity authorities in Saudi Arabia and the United Arab Emirates set rules for critical operators, and large projects such as new cities connect millions of sensors. Qatar and Egypt are investing in digital infrastructure. Key barriers include skills shortages and reliance on foreign vendors. One opportunity is critical infrastructure security for energy, water, and transport networks.

The IoT security market is moderately concentrated. Cisco Systems, Palo Alto Networks, Microsoft, Fortinet, and Check Point Software lead through broad security platforms, while Armis, Forescout, Claroty, and Nozomi Networks specialize in device visibility and operational technology security. IBM, Broadcom, Trend Micro, and CyberArk provide services, endpoint, and identity protection.

Companies compete on device discovery, threat detection, ease of deployment, integration with existing security tools, and industry expertise. Large platform vendors bundle IoT security into firewalls and cloud suites. Specialists win where deep device knowledge matters, such as factories, hospitals, and utilities. Libraries of device profiles, threat intelligence, and partnerships with industrial equipment makers are key advantages. Managed security providers and telecom operators also resell IoT security services to smaller customers.

Strategic moves show how competition is changing. In September 2025, Mitsubishi Electric agreed to acquire Nozomi Networks for about US$ 1 billion. In December 2025, ServiceNow agreed to acquire Armis for about US$ 7.75 billion, with closing expected in the second half of 2026. These moves show competition shifting toward large platforms that combine device visibility, IT workflows, and industrial equipment.

Three themes shape vendor strategy. First, specialists are being acquired by larger platform and industrial companies. Second, platforms are adding AI detection. Third, vendors are preparing for new rules, offering tools that help device makers and operators meet compliance deadlines. Vendors that combine visibility, protection, and compliance are best placed to win share.

Recent Industry Developments

• December 2025: ServiceNow agreed to acquire Armis for about US$ 7.75 billion, with closing expected in the second half of 2026 – combines asset visibility with IT workflow and exposure management.
• September 2025: Mitsubishi Electric agreed to acquire Nozomi Networks for about US$ 1 billion – links industrial equipment with operational technology security.
• January 2025: The U.S. Federal Communications Commission launched the U.S. Cyber Trust Mark labeling program for consumer IoT devices – encourages IoT device security by design.
• December 2024: The European Union Cyber Resilience Act entered into force, with main obligations from 2027 – sets mandatory security requirements for connected products.

• Cisco Systems
• Palo Alto Networks
• Microsoft
• Fortinet
• Armis
• Check Point Software
• IBM
• Broadcom
• Trend Micro
• Forescout
• Claroty
• Nozomi Networks

Component

• Solutions
• Services

Security Type

• Network Security
• Endpoint Security
• Application Security
• Cloud Security

End Use

• Energy & Utilities
• Manufacturing
• Automotive
• Transportation
• Consumer Electronics
• Healthcare
• Others

Regions

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa