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Cyber Signals Issue 3: Cyber risks to IoT and OT devices are on the rise

The convergence of IT and OT

The pervasiveness, vulnerability, and cloud connectivity of Internet-of-Things (IoT) and Operational Technology (OT) devices represent a rapidly expanding, often unchecked risk surface affecting a wider array of industries and organizations. Rapidly increasing IoT creates an expanded entry point and attack surface for attackers. With OT becoming more cloud-connected and the IT-OT gap closing, access to less secure OT is opening the door for damaging infrastructure attacks.

Microsoft identified unpatched, high-severity vulnerabilities in 75% of the most common industrial controllers in customer OT networks.1

Watch the Cyber Signals digital briefing where Vasu Jakkal, CVP of Microsoft Security interviews key threat intelligence experts on IoT and OT vulnerabilities and how to help stay protected.

Threat briefing

Adversaries compromise internet-connected devices to gain access to sensitive critical infrastructure networks.

Over the past year, Microsoft has observed threats exploiting devices in almost every monitored and visible part of an organization. We have observed these threats across traditional IT equipment, OT controllers and IoT devices like routers and cameras. The spike in attackers’ presence in these environments and networks is fueled by the convergence and interconnectivity many organizations have adopted over the past few years.

The International Data Corporation (IDC) estimates there will be 41.6 billion connected IoT devices by 2025, a growth rate higher than traditional IT equipment. Although security of IT equipment has strengthened in recent years, IoT and OT device security has not kept pace, and threat actors are exploiting these devices.

It is important to remember attackers can have varied motives to compromise devices other than typical laptops and smartphones. Russia’s cyberattacks against Ukraine, as well as other nation-state sponsored cybercriminal activity, demonstrate that some nation-states view cyberattacks against critical infrastructure as desirable for achieving military and economic objectives.

Seventy two percent of the software exploits utilized by “Incontroller,” what Cybersecurity and Infrastructure Security Agency (CISA) describes as a novel set of state-sponsored, industrial control system (ICS) oriented cyberattack tools, are now available online. Such proliferation fosters wider attack activity by other actors, as expertise and other barriers to entry diminish.

As the cybercriminal economy expands and malicious software targeting OT systems become more prevalent and easier-to-use, threat actors have more varied ways of mounting large-scale attacks. Ransomware attacks, previously perceived as an IT-focused attack vector, are today affecting OT environments as seen in the Colonial Pipeline attack, where OT systems and pipeline operations were temporarily shut down while incident responders worked to identify and contain the spread of ransomware on the company’s IT network. Adversaries realize that the financial impact and extortion leverage of shutting down energy and other critical infrastructures is far greater than other industries.

Timeline showing real world examples of cyber attacks on IoT and OT devices

OT systems include almost everything supporting physical operations, spanning dozens of vertical industries. OT systems aren’t solely limited to industrial processes, they can be any special purpose or computerized equipment, such as HVAC controllers, elevators, and traffic lights. Various safety systems fall into the category of OT systems.

Microsoft has observed Chinese-linked threat actors targeting vulnerable home and small office routers in order to compromise these devices as footholds, giving them new address space less associated with their previous campaigns, from which to launch new attacks.

While the prevalence of IoT and OT vulnerabilities presents a challenge for all organizations, critical infrastructure is at increased risk. Disabling critical services, not even necessarily destroying them, is a powerful lever.


  • Work with stakeholders: Map business-critical assets, in IT and OT environments.
  • Device visibility: Identify what IoT and OT devices are critical assets by themselves, and which are associated with other critical assets.
  • Perform a risk analysis on critical assets: Focus on the business impact of different attack scenarios as suggested by MITRE.
  • Define a strategy: Address the risks identified, driving priority from business impact.

Defending against attacks

IoT introduces new business opportunities – but also great risk

As IT and OT converge to support expanding business needs, assessing risk and establishing a more secure relationship between IT and OT require consideration of several control measures. Air-gapped devices and perimeter security are no longer sufficient to address and defend against modern threats like sophisticated malware, targeted attacks, and malicious insiders. The growth of IoT malware threats, for example, reflects this landscape’s expansion and potential to overtake vulnerable systems. Analyzing 2022 threat data across different countries, Microsoft researchers found the largest share of IoT malware, 38 percent of the total, originating from China’s large network footprint. Infected servers in the United States put the U.S. in second place, with 18 percent of observed malware distribution.

Advanced attackers are leveraging multiple tactics and approaches in OT environments. Many of these approaches are common in IT environments but are more effective in OT environments, like discovery of exposed, Internet-facing systems, abuse of employee login credentials or exploitation of access granted to third-party suppliers and contractors to the networks.

The convergence between the IT world’s laptops, web applications and hybrid workspaces, and the OT world’s factory and facility-bound control systems brings severe risk consequences by affording attackers an opportunity to “jump” air gaps between formerly physically isolated systems. Thereby making IoT devices, like cameras and smart conference rooms, risk catalysts by creating novel entryways into workspaces and other IT systems.

Top countries originating IoT malware infection during 2022

Breakdown of top countries originating IoT malware
Percentages of observed outbound malware infection attempts. Country of origin (location identification) does not infer nation-state sponsored activity (actor attribution).
Microsoft threat analysis of 2022 data.

In 2022 Microsoft assisted a major global food and beverage company, using very old operating systems to manage factory operations, with a malware incident. While performing routine maintenance on equipment that would later connect to the Internet, malware spread to factory systems via a compromised contractor laptop.

Unfortunately, this is becoming a fairly common scenario. While an ICS environment can be air-gapped and isolated from the Internet, the moment a compromised laptop is connected to a formerly secure OT device or network it becomes vulnerable. Across the customer networks Microsoft monitors, 29 percent of Windows operating systems have versions that are no longer supported. We have seen versions such as Windows XP and Windows 2000 operating in vulnerable environments.

Because older operating systems often don’t get the updates required to keep networks secure, and patching is challenging in large enterprises or manufacturing facilities, prioritizing IT, OT, and IoT device visibility is an important first step for managing vulnerabilities and securing these environments.

A defense based on Zero Trust, effective policy enforcement, and continuous monitoring can help limit the potential blast radius and prevent or contain incidents like this in cloud connected environments.

Investigating OT equipment requires specific unique knowledge and understanding the state of security of industrial controllers is crucial. Microsoft released an opensource forensics tool to the defender community, to help incident responders and security specialists better understand their environments and investigate potential incidents.

While most think of critical infrastructure as roads and bridges, public transportation, airports, and water and electrical grids, CISA recently recommended that space and the bioeconomy become new critical infrastructure sectors. Citing the potential for disruption within various sectors of the U.S. economy to cause debilitating impacts on society. Given the world’s reliance on satellite enabled capabilities, cyberthreats in these sectors could have global implications well beyond what we’ve seen thus far.


  • Implement new and improved policies: Policies stemming from the Zero Trust methodology and best practices provide a holistic approach for enabling seamless security and governance across all your devices.
  • Adopt a comprehensive and dedicated security solution: Enable visibility, continuous monitoring, attack surface assessment, threat detection, and response.
  • Educate and train: Security teams require training specific to threats originating from or targeting IoT/OT systems.
  • Examine means of augmenting existing security operations: Address IoT and OT security concerns to achieve a unified IT and OT/IoT SOC across all environments.

Learn more about how to help protect your organization with insights from David Atch, Microsoft Threat Intelligence, Head of IoT/OT Security Research.

Security snapshot

78 percent increase in disclosures of high-severity vulnerabilities from 2020 to 2022 in industrial control equipment produced by popular vendors.1

Microsoft identified unpatched, high-severity vulnerabilities in 75% of the most common industrial controllers in customer OT networks.1

Over 1 million connected devices publicly visible on the Internet running Boa, an outdated and unsupported software still widely used in IoT devices and software development kits (SDKs).1

1Methodology: For snapshot data, Microsoft platforms including Microsoft Defender for IoT, Microsoft Threat Intelligence Center and Microsoft Defender Threat Intelligence provided anonymized data on device vulnerabilities, such as configuration states and versions, and data on threat activity on components and devices. In addition, researchers used data from public sources, such as the National Vulnerability Database (NVD) and Cybersecurity & Infrastructure Security Agency (CISA). The stat on “unpatched, high-severity vulnerabilities in 75% of the most common industrial controllers in customer OT networks” is based on Microsoft engagements in 2022. Control systems in critical environments include electronic or mechanical devices which utilize control loops for improved production, efficiency, and safety.

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