The global IoT security market is set to boom with a CAGR of 20.8% that will see it reach $106.4bn by 2031, according to Insight Partners.

Among factors driving this growth is an increase in Industry 4.0 IoT security incidents that highlight the need for increased cyber resilience. These IoT vulnerabilities give hackers new avenues to exploit. Other factors include an increase in IoT security regulations and an increase in security concerns for critical infrastructure.

The IoT security market is expected to reach $106.4bn by 2031 from $28.3bn in 2024, a CAGR of 20.8%. The rapid and widespread adoption of IoT devices across a broad spectrum of industries is a fundamental factor propelling the growth of the security market. From smart factories and connected healthcare systems to intelligent transportation networks and smart home devices, the number of IoT endpoints being deployed globally is rising at an unprecedented pace.

This explosive growth in connected devices has led to an equally dramatic expansion in the cyber-attack surface. Each additional device represents a potential entry point for malicious actors, making it increasingly difficult for organisations to manage security risks using traditional IT security frameworks.

IoT environments are inherently complex, often comprising a mix of legacy systems, low-power devices and real-time data transmission across heterogeneous networks. These factors make IoT ecosystems highly vulnerable to cyber attacks, including data breaches, device hijacking, ransomware and distributed denial-of-service (DDoS) attacks. Moreover, many IoT devices are deployed with few built-in security features, either due to cost constraints or design limitations, leaving them susceptible to unauthorised access and manipulation.

As a result, there is a growing demand for robust, scalable and context-aware security that can offer device authentication, encrypted communication, anomaly detection and real-time threat response.

The increasing frequency and sophistication of cyber attacks targeting IoT ecosystems are among the most critical drivers accelerating the growth of the global IoT security market. As organisations across industries deploy vast networks of connected devices, these IoT endpoints have become prime targets for cyber criminals seeking to exploit weak security protocols, outdated firmware and unmonitored device networks. Ransomware attacks, botnets and unauthorised data access are among the most prevalent threats.

High-profile incidents, such as the Mirai botnet attack that disrupted major web sites by hijacking unsecured IoT devices, have demonstrated the far-reaching consequences of inadequate IoT security. These breaches not only cause operational disruptions but also result in significant financial losses, legal liabilities and reputational damage for affected organisations.

The rapid adoption of cloud-based platforms for managing, processing and storing IoT data is a major catalyst for growth in the IoT security market. As enterprises increasingly shift their IoT infrastructure to the cloud to gain scalability, cost efficiency and real-time analytics capabilities, they are simultaneously exposing their ecosystems to new security vulnerabilities.

Cloud-based IoT platforms facilitate seamless connectivity between devices, edge networks and centralised data centres, enabling real-time monitoring, predictive maintenance and smart automation across sectors such as manufacturing, energy, transportation, agriculture and healthcare. However, this interconnectedness significantly expands the attack surface, making it imperative to implement robust end-to-end security protocols.

In 2024, North America led the market with a large revenue share, followed by Europe and Asia Pacific. Asia Pacific is expected to register the highest growth during the forecast period.

Based on type, the IoT security market is divided into network, endpoint, cloud, application security and others. The cloud segment is anticipated to grow in the forecast period.

The market is segmented into threat analysis, identity access management, data loss protection, encryption, dispatch and incident response, distributed denial of service protection, and others. The identity access management segment is anticipated to grow in the forecast period.

Based on application, the IoT security market is divided into smart homes, connected cars, information and communication technology (ICT), smart factories, financial, smart retail, smart healthcare, smart transportation, wearables, and others. The ICT segment is anticipated to grow in the forecast period.

A few of the major companies operating in the IoT security market are IBM, Microsoft, Amazon Web Services, Google, Intel, Cisco, Ericsson, Thales, Allot and Infineon.

North America has emerged as the dominant region, driven by its rapid pace of technological adoption across various industry verticals. The region’s leadership is primarily attributed to the widespread implementation of digital tools, coupled with investments in technologies by both public and private sector entities. In particular, government initiatives promoting smart infrastructure and cyber security have created a strong foundation for market expansion.

The presence of several key IoT security providers headquartered in the USA further strengthens North America’s market position. These companies are heavily focused on innovation, product development and partnerships, which contribute to the continuous evolution of security tailored for complex IoT ecosystems.

In summary, North America’s robust technological infrastructure, strong innovation ecosystem and proactive approach to cyber security make it the leading region in the global IoT security market. With ongoing investments in digital transformation and a growing need for secure IoT frameworks, the region is expected to maintain its dominance in the coming years. Other regions are also poised for growth, but North America remains the benchmark for IoT security innovation and implementation.

For more on the report, see www.theinsightpartners.com/reports/iot-security-market.