PitchBook Analyst Note: Getting to the Root of IoT/OT Security

Critical infrastructure cyber attacks yield IoT/OT security opportunities

Edge devices present an expanding vulnerability to enterprises as more of them are connected to the cloud. Recent breaches including the Colonial Pipeline ransomware attack have led to a reconsideration of the risks posed by internet-connected devices across internet of things (IoT) and operational technology (OT).

Our analyst note segments the IoT/OT security value chain according to product category and use cases, comparing investment activity and end user spending in each segment.

Key takeaways

• Large internet of things (IoT) and operational technology (OT) security companies can be built across segments of the edge device value chain as well as for individual device types.
   
• Device-level security, industrial control systems (ICS)/OT security, and connected vehicle security receive disproportionately low totals of VC funding relative to their market sizes.
   
• IoT-focused platforms are limited in addressing the leading use cases for IoT/OT security spending including manufacturing, natural resources, and transportation given devices’ limited connectivity to the cloud.