For many organisations, IoT security has traditionally been viewed as a cost centre—an unavoidable expense required to reduce risk. In 2026, that perspective is changing. As IoT environments scale and regulatory pressure increases, security leaders are being asked not only to protect devices, but to demonstrate clear business value. This article explores how to measure IoT security ROI, best practices for maximizing returns, and industry-specific use cases that illustrate the strategic benefits of robust IoT security investments.

IoT identity security, when implemented through automation and lifecycle management, delivers measurable return on investment. Aligning IoT security strategies with business needs is essential to ensure that investments directly support organizational goals and operational requirements. The challenge lies in understanding where that value comes from and how to quantify it in terms that resonate with both technical and executive stakeholders, ultimately helping organizations achieve a competitive advantage.

Introduction to IoT

The Internet of Things (IoT) is transforming the business landscape, empowering organizations to harness IoT data and connected devices for innovation, efficiency, and revenue growth. As IoT projects become more prevalent, companies are discovering new ways to deliver tangible value—whether through predictive maintenance that reduces downtime, or by enhancing customer satisfaction with smarter, more responsive services. The proliferation of IoT devices and solutions is driving a wave of digital transformation across industries, but it also introduces new security concerns that cannot be ignored.

With every new device added to the network infrastructure, the potential attack surface expands, making robust security measures essential. As businesses invest in IoT solutions, they must also anticipate future technological advancements and evolving threats. A forward-thinking IoT strategy that prioritizes security not only protects critical assets but also ensures a positive ROI by minimizing risk and maximizing the benefits of IoT adoption. By addressing security from the outset, organizations can deliver on the promise of IoT, achieve a competitive edge, and position themselves for sustainable growth in an increasingly connected world.

Why ROI Matters More Than Ever

Budgets are under greater scrutiny than ever before. Security teams must compete with other strategic initiatives, and investment decisions are increasingly driven by outcomes rather than intentions. The ROI of IoT security primarily comes from avoided costs and operational efficiency, rather than direct revenue generation.

At the same time, the cost of inaction has risen sharply. Security investments are essential for managing business risk, which is a core financial consideration. Breaches involving IoT devices can lead to operational disruption, regulatory penalties, reputational damage, and long-term loss of trust. In this context, ROI is not just about savings—it is about avoided losses and enabled growth. Many organizations struggle to quantify the ROI of their IoT investments, making it challenging to justify expenditures. Applying a clear roi equation—considering both direct cost savings and indirect benefits—helps organizations measure the true value of IoT security initiatives.

Understanding IoT Projects

Successful IoT projects are built on the seamless integration of IoT systems, connected devices, and smart technologies to achieve clear business objectives. These initiatives require careful consideration of the initial investment, ongoing costs, data management, and the complexities of regulatory compliance. When executed effectively, IoT projects deliver measurable business outcomes—driving business transformation, unlocking new revenue streams, and enhancing operational efficiency.

However, many businesses encounter significant challenges as they scale their IoT deployments. The complexity of managing vast numbers of IoT devices, ensuring continuous monitoring, and maintaining security across diverse environments can be resource intensive. Ongoing costs related to maintenance, data management, and compliance can quickly add up, especially if security is not prioritized from the start.

To overcome these hurdles, organizations must adopt a data-driven approach, leveraging actionable insights to optimize performance and reduce costs. Prioritizing IoT security is critical—not only to protect critical assets and prevent data breaches, but also to ensure regulatory compliance and safeguard business value. By investing in new technologies and robust IoT strategies, businesses can future-proof their operations, deliver long-term value, and drive sustainable growth in an ever-evolving digital landscape.

Understanding the Cost of Weak IoT Identity

To calculate ROI, organisations must first understand the costs associated with weak or manual identity management. These costs often go unnoticed because they are distributed across teams and processes.

Common cost drivers include time spent manually issuing and rotating certificates, outages caused by expired credentials, incident response efforts triggered by compromised devices, and delays in deploying new IoT initiatives due to security concerns. Operational overhead is a significant factor, as managing and maintaining IoT systems manually increases resource consumption and reduces efficiency.

Over time, these inefficiencies compound, creating a hidden tax on operations. When evaluating IoT security ROI, it’s important to consider the total cost of ownership, which includes not only the initial device purchase but also ongoing expenses such as connectivity, maintenance, updates, and support. The financial impact of weak security is substantial: the average cost of a successful breach on a single IoT device is $330,000, while enterprise-wide IoT breaches generally range between $5 million and $10 million.

Reducing Breach Risk and Incident Impact

One of the most significant sources of ROI comes from risk reduction. Unmanaged or poorly authenticated devices are a common entry point for attackers. By implementing strong, automated device identity, organisations significantly reduce the likelihood of compromise.

In 2025, the ROI for IoT security is calculated as ‘Value of Risk Avoided,’ focusing on preventing catastrophic losses. The ROI for IoT security can be realized through prevented breaches, saving approximately $330,000 per incident. Data breaches involving IoT devices are among the most costly due to their impact on operations and supply chains, where compromised supply chains can lead to significant economic costs and operational disruptions.

Even when incidents do occur, identity-driven controls enable faster containment. Devices can be isolated or decommissioned quickly, limiting lateral movement and reducing recovery costs.

While avoided breaches are difficult to quantify precisely, industry data consistently shows that prevention and rapid response dramatically lower total incident cost.

Operational Efficiency Through Automation

Automation is the foundation of achieving ROI in IoT security. Automation delivers direct, measurable savings. Tasks that once required manual intervention—such as certificate issuance, renewal, and revocation—are handled automatically, resulting in significant cost savings.

This reduces labour costs and frees skilled staff to focus on higher-value work. It also eliminates human error, which is a frequent cause of outages and security incidents. Cost reduction is a powerful aspect of IoT ROI, often coming from efficiency gains and reduced operational overhead.

In large IoT environments, these efficiency gains alone can justify investment in automated identity platforms.

Avoiding Downtime and Service Disruption

Expired or mismanaged credentials are a common cause of service disruption in IoT environments. These outages can halt production, interrupt services, or impact customer experience.

Automated lifecycle management prevents these issues by ensuring credentials are rotated seamlessly and on time. The result is improved uptime and reliability—outcomes that have clear financial value, particularly in industrial and critical infrastructure settings.

Accelerating Time to Value for IoT Initiatives

Security friction often slows innovation. When onboarding new devices or deploying new services requires manual approvals and configuration, projects stall.

Identity automation streamlines onboarding, allowing devices to be deployed securely and quickly. This accelerates time to value for IoT initiatives, enabling organisations to realise benefits sooner.

Faster deployment translates into earlier revenue, improved competitiveness, and greater organisational agility.

Supporting Compliance and Reducing Audit Costs

Compliance activities consume significant time and resources. Manual evidence gathering, remediation, and audit preparation can be costly and disruptive.

Automated identity management supports compliance by maintaining consistent controls and generating audit-ready records. This reduces the effort required to demonstrate compliance and lowers the risk of findings or penalties.

For many organisations, reduced audit overhead represents a meaningful component of ROI.

Building the Business Case

When building a business case for IoT identity security, it is important to present a balanced view of costs and benefits. This includes both hard savings, such as reduced labour and downtime, and softer benefits, such as improved resilience and scalability.

Quantifying these benefits requires collaboration between security, operations, and finance teams. Tools such as ROI calculators can help translate technical improvements into financial terms that decision-makers understand.

Long-Term Value and Strategic Impact

Beyond immediate savings, IoT identity security delivers long-term value by enabling sustainable growth. As device estates expand, automated identity management scales without linear increases in cost or complexity.

This positions organisations to adopt new technologies and business models with confidence, knowing that security will not become a bottleneck.

In this sense, identity security is an investment in future capability, not just present protection.

Final Thoughts

In 2026, the ROI of IoT identity security is clear. By reducing risk, improving efficiency, and enabling growth, automated identity management delivers value across the organisation.

Security leaders who can articulate this value in business terms are better positioned to secure investment and drive meaningful change. IoT identity security is no longer just about defence—it is about enabling the organisation to operate securely at scale.

Platforms developed by companies such as Device Authority are designed to support this value-driven approach, helping organisations quantify and realise the return on their security investments.