A Decade of Ransomware Chaos – Protecting IoT and Edge Systems in 2026

Over the past decade, ransomware has evolved from a small-scale threat targeting personal computers into a systemic risk affecting critical infrastructure, smart factories, and connected devices.

In 2015, the FBI received approximately 2,400 ransomware complaints, resulting in losses exceeding $24 million. That same year, broader estimates put ransomware damage at around $300 million. By 2017, the scale had expanded, and damage estimates had risen to $5 billion. Fast forward to 2021, ransomware damages to organizations were estimated at $20 billion, with attacks occurring roughly every 11 seconds.

Today, projections already warn of a sharp escalation: global ransomware damage could reach $57 billion in 2026, and by 2031, costs could soar beyond $275 billion annually. Meanwhile, in 2025, the average cost per attack is up by 17%.

Connected devices are especially vulnerable: many lack built-in security, operate on outdated firmware, or are deployed without segmentation. When compromised, these endpoints can give attackers direct access to industrial networks or serve as lateral movement paths to high-value assets.

Let’s see how manufacturers, smart-city operators, and IoT service providers can strengthen resilience before ransomware exploits their weakest links.

Understanding How Ransomware Targets IoT and Edge Systems

Traditional ransomware attacks focus on encrypting IT systems. In contrast, attacks against IoT and OT environments often aim to disrupt operations, halting production lines, disabling sensors, or corrupting telemetry data.

A typical ransomware campaign unfolds as follows:

1. Reconnaissance: Attackers scan for exposed smart devices, APIs, or MQTT brokers, often identifying legacy devices running unpatched firmware.
2. Initial Access: Compromise occurs through weak credentials, misconfigured edge gateways, or phishing emails that infect engineering laptops later connected to OT networks.
3. Lateral Movement: Once inside, attackers pivot from IoT endpoints to supervisory systems, exploiting flat network architectures.
4. Privilege Escalation and Impact: Hackers may encrypt configuration servers, disable PLCs or gateways, and demand ransom to restore control, sometimes threatening to leak telemetry or operational data.

Recent incidents show ransomware operators increasingly weaponizing automation and AI to speed reconnaissance and payload deployment across distributed edge systems, including the use of AI to generate convincing deepfakes for phishing.

IoT Ransomware Defense: 5 Strategies for Lasting Resilience Past 2026

Attackers using ransomware have ample time to prepare and use all attack vectors, from social engineering to exploiting zero-day vulnerabilities. Therefore, the protection system must be comprehensive and layered.

Step 1. Form a Team and Assign Roles

IoT security cannot rely solely on IT teams. Most organizations face a shortage of skilled cybersecurity professionals, especially at the mid-level. Bring together engineers, developers, and security specialists to map device inventories, firmware dependencies, potential access points, and remediation processes. Provide additional security training for all team members and assign clearly defined roles. Everyone involved should understand current threat vectors and the methods attackers use to compromise connected infrastructure.

Step 2. Run Regular Audits

During a security audit, teams identify unauthorized or outdated network connections, unnecessary open ports, obsolete services, and active accounts that may no longer be required.

The main objectives of the audit are:

• Maintain an updated inventory of all connected assets, from sensors to gateways. Catalog all company assets to build and maintain an up-to-date network map, including interactions between services, systems, and users.
• Determine which services, device APIs, and management interfaces are exposed to the internet and could be scanned, exploited, or used as entry points. Validate firmware integrity and signed updates.

The audit format depends on the organization’s maturity level. Early-stage companies may start with an internal audit, while more mature ones often move toward Penetration Testing or full Red Team exercises.

Step 3. Threat Modeling and Risk Assessment

Once all necessary asset information has been gathered, the next step is to identify potential threat sources and build an attacker model. It’s essential to recognize that this model is dynamic. It can evolve with subjective factors, such as company growth or changes in business processes, as well as with objective factors, such as political or regional developments. IoT usually adds complexity due to different vendors, protocols, and update cadences—model attack paths from connected sensors through cloud management consoles.

Vulnerability identification involves more than just finding weaknesses. It also requires prioritizing them for fixing. The most critical vulnerabilities — those impacting systems vital to business continuity — should be addressed first—for example, temperature sensors controlling manufacturing processes or smart-grid controllers tied to uptime.

Step 4. Evaluate the Effectiveness of Your Security Controls

Most organizations already have specific security measures and architectural safeguards in place. When evaluating their effectiveness, two key questions should be asked:

• What would be the impact on the company if this risk were realized?
• Are the existing security controls sufficient to mitigate this specific risk?

The answers to these questions, along with the results of the overall assessment, help determine whether the organization needs to invest more in strengthening its defenses against specific IoT threats or attack vectors.

Step 5. Risk Management

The information security team begins risk mitigation by developing a plan and implementing measures that disrupt or prevent the attack chain. The focus starts with the most critical risks and then moves to less severe ones. Specific actions differ from company to company, but may include establishing a structured patch management program that covers embedded firmware and containerized workloads. Use frameworks such as NIST SP 800-82 and ISA/IEC 62443.

Security by Design: Building IoT Architecture That Withstands Ransomware

AI now shapes nearly every architecture decision, but it’s essential not to lose sight of security fundamentals. Security measures should be incorporated as early as the IoT infrastructure design stage to make ransomware attacks significantly more difficult.

Distributing infrastructure across multiple sites helps reduce the risk of a complete system outage. Storing backups separately ensures they remain available and functional even if edge controllers, gateways, or management servers are encrypted. Network segmentation further limits the attacker’s reach, containing potential damage within a compromised segment instead of allowing it to spread across the entire system.

Using isolated environments (through virtualization or sandboxing) enables secure testing of software and updates. To maintain integrity, container images should be pulled only from trusted registries. Furthermore, for the highest level of device security, you should enforce secure boot and implement code signing to ensure that only verified, digitally signed firmware can execute on devices.

Technical Measures: Practical Security Recommendations

1. Securely publish services using a Next-Generation Firewall (NGFW), Intrusion Prevention System (IPS), and Web Application Firewall (WAF).
2. Protect remote access with a strong business VPN and enable Multi-Factor Authentication (MFA).
3. Validate the security of container images and sign them digitally before deployment.
4. Scan source code for vulnerabilities using SAST, DAST, and SCA tools. Extend this process to device firmware and related cloud workloads by systematically scanning them for known vulnerabilities. Monitor container image security with dedicated vulnerability scanners to prevent compromised components from entering production environments.
5. Harden configurations using CIS Benchmarks for IT systems and applying OT/ICS-specific baselines for edge gateways and control systems.
6. Limit admin privileges and apply Role-Based Access Control (RBAC) for maintenance and device management.
7. Digitally sign container images to ensure integrity and authenticity.
8. Monitor telemetry via Security Information and Event Management (SIEM) platforms that integrate IT and OT data.

Organizational Measures: Practical Security Recommendations

Regular audits help identify unauthorized changes, outdated network connections, outdated software/firmware, and unnecessary accounts that haven't been disabled promptly.

Risk assessments enable organizations to respond quickly to changes in the security landscape, adopt a systematic approach to protecting infrastructure, rank potential threats, and prioritize mitigation efforts.

System updates and configuration changes should be implemented carefully to avoid introducing new vulnerabilities. It’s also essential to manage end-of-life systems, since vendors may stop providing updates and security patches once support ends.