Config Chaos: How IoT and Cloud Misconfigurations Undermine Security

By: Antoinette Hodes, Evangelist & Global Solution Architect, Check Point Software Technologies

In an increasingly connected world, IoT and cloud infrastructures are the backbone of modern innovation. As IoT evolves, it intertwines with hybrid cloud architectures. APIs—essential for communication between IoT devices and the cloud—serve as both lifelines and attack vectors.

Yet, as these technologies integrate deeper into our lives and businesses, they introduce hidden vulnerabilities—misconfigurations—that few fully understand. These oversights are no longer merely technical glitches; they are amplifiers of systemic risk, creating cascading failures across the digital ecosystem and staggering costs. Human error is also a common cause for misconfiguration.

According to Verizon’s Data Breach investigation report, human error is responsible for 82% of data breaches. Let’s explore how these vulnerabilities emerge and challenges emerging in IoT-cloud ecosystems.

How simple mistakes lead to complex breaches 

IoT devices are often rushed to market with minimal security considerations. This trend is driven by several factors, including the intense competition to be the first to offer a particular feature in the market, as well as budget constraints that often limit the resources allocated to thorough security testing and design. Default credentials, open ports and inadequate or even no update mechanisms are the most common issues.

However, deeper misconfigurations like unsecured MQTT (Message Queuing Telemetry Transport) brokers can lead to unauthorised access and massive data leaks. Think of MQTT brokers like post offices that handle messages. The problem lies not only in the devices but also in how they interact with networks, and each other. Their widespread adoption means billions of devices are connected globally, ranging from smart home assistants to industrial control systems.

Here’s why IoT security is particularly precarious:

• Default credentials: Many IoT devices are shipped with default usernames and passwords, which users often fail to change, making them easy targets for attackers.
• Lack of updates: Manufacturers frequently deprioritise firmware updates, leaving vulnerabilities unpatched.
• Limited visibility: IoT devices often operate in shadow IT environments, escaping the notice of security teams.

When IoT devices are integrated into cloud systems, these vulnerabilities don’t just remain localised, they are amplified.

Cloud misconfigurations: A catalyst for exploitation

Cloud services promise scalability and convenience but demand precision in setup. A simple misstep, such as leaving a storage bucket public or mismanaging Identity and Access Management (IAM) roles, can expose critical assets to the internet. Worse still, the nature of cloud environments means that vulnerabilities can propagate across regions and accounts, amplifying their impact. A report from XM Cyber which analysed 40 million exposures, states that 80% of exposures are caused by identity and credential misconfigurations. Then we have improperly configured databases. Common missteps include:

• Publicly accessible storage buckets: Sensitive data stored in cloud buckets often lacks proper access controls, leading to breaches.
• Weak identity and access management (IAM): Misconfigured permissions can allow attackers to escalate privileges and access critical resources.
• Overlooked default settings: Cloud services often come with default settings that prioritise usability over security.

These misconfigurations act as a gateway for attackers, who exploit IoT weaknesses to gain a foothold in the cloud.

The anatomy of misconfigurations

The role of APIs in IoT and cloud ecosystems cannot be overstated. APIs are the backbone of IoT and cloud integration, facilitating everything from device management to data transfer in real time. However, they are also one of the most exploited components in these environments. Misconfigured or poorly secured APIs can:

• Expose sensitive device telemetry to unauthorised users.
• Allow attackers to manipulate data streams or device functionality.
• Serve as entry points for lateral movement within hybrid cloud infrastructures.

For instance, API keys embedded in IoT firmware can be extracted and reused by attackers to compromise entire cloud-hosted IoT fleets.

Open ports, open doors | How much of IoT security is misconfiguration-driven?

Microminder’s report states that 80% security breaches are caused by identity and credential misconfiguration. This figure dwarfs other common IoT vulnerabilities such as unpatched software or outdated firmware. While the percentage varies depending on the industry and use case, misconfiguration is a dominant factor across smart homes, industrial IoT (IIoT), and healthcare devices.

Why misconfigurations amplify threats

1. Attack surface multiplication | The quiet growth of IoT and cloud vulnerabilities: IoT ecosystems and cloud environments are vast, dynamic and interconnected. A misconfigured IoT camera, for instance, can serve as an entry point to an entire corporate network. A misconfigured cloud service, video stream can expose sensitive customer data.
2. Blind spots in detection | How blind spots erode your security posture: Misconfigurations often fly under the radar of traditional security monitoring tools. Attackers exploit these blind spots, leveraging tools like Shodan to scan for vulnerable IoT devices or misconfigured cloud assets.
3. Speed of exploitation | Why IoT devices can’t afford delayed security: Once discovered, misconfigurations can be exploited within minutes. Attackers use automated tools to weaponise these errors at scale, launching botnets or ransomware campaigns.

When IoT and Cloud turn into Toxic Combinations

IoT and the cloud can be a dangerous cocktail of risk when misconfigurations meet overprivileged access and insecure design. Picture a cloud-based virtual machine with exploitable vulnerabilities, exposed to the internet, with overprivileged access deeper into the cloud account or on-premises networks. This is granting attackers a bridge to the cloud or your network. Now, amplify that threat through IoT devices, like cheap cameras or sensors – offering cloud connectivity by default. These devices can become invisible conduits of risk, syncing to poorly configured cloud storage that leaks data or even pulling firmware updates from a compromised source.

A single exploited IoT device connected to the cloud can transform into an entry point for attackers, propagating botnets, data breaches and supply chain havoc. As more OEM providers bake insecure cloud dependencies into their IoT products, the potential for unseen exploitation scales dramatically, endangering businesses and consumers alike.

What no one talks about

1. Default configurations are everywhere: Many IoT devices hold default usernames and passwords. These credentials are often available online, making them a goldmine for attackers. Shockingly, 15% of consumers never change default settings, exposing their devices to automated botnet scans.
2. Shadow IoT is growing unchecked: Shadow IoT devices, unauthorised or unknown devices on a network worsen the misconfiguration problem.
3. Protocol Pitfalls: Protocols like MQTT and CoAP, widely used in IoT, are often deployed without proper security measures.
4. Misconfigurations in the cloud backend: IoT devices often rely on cloud-based platforms. Misconfigured cloud storage buckets or APIs linked to IoT devices account are often ignored in traditional IoT security discussions.

Why hybrid clouds complicate security

Hybrid cloud environments, combining public and private clouds, provide IoT ecosystems with scalability and resilience. However, their complexity introduces unique challenges:

• Misaligned security policies: Different security configurations across private and public clouds can create gaps. For example, an IoT device connecting to a private cloud might adhere to stringent encryption protocols, while its connection to a public cloud uses weaker settings.
• Data residency and transfer risks: Telemetry data often moves across borders in hybrid setups, potentially violating compliance rules if misconfigured.
• Visibility challenges: Traditional monitoring tools struggle to provide end-to-end visibility across hybrid clouds, making it harder to detect misconfigurations or breaches.

Other amplifications are data silos. Poorly configured APIs and access controls can isolate critical telemetry, leading to blind spots in monitoring. Attackers exploit these silos to remain undetected. Secondly, latency issues caused by misconfigured cloud regions can lead to delayed responses in IoT systems, impacting operations like predictive maintenance or real-time alerts. Lastly, misconfigurations in resource overlap can ripple through, affecting storage, compute, and network services simultaneously, as APIs often interact with multiple cloud resources.

Behind the buzzwords

IoT and cloud misconfigurations create a cascade of challenges that extend far beyond initial breaches. For IoT systems, the consequences often include physical damages such as equipment failures, safety risks or operational disruptions, all of which compound financial losses. In cloud environments, the aftermath can involve regulatory fines, customer lawsuits, and reputational damage that far exceed the initial response costs. These issues are further amplified by stringent compliance requirements under frameworks like the GDPR and the EU’s Cyber Resilience Act (CRA), which impose heavy penalties for violations, especially on IoT products now under increased scrutiny. Worse still, misconfigurations rarely exist in isolation. In today’s interconnected ecosystems, a single misconfigured IoT device, such as a CCTV camera can trigger a chain reaction, providing attackers with lateral access to critical infrastructure and amplifying the overall impact. This convergence of compounding costs, regulatory risks, and chain reactions underscores the urgent need for meticulous configuration and proactive security management.

Key takeaways

1. Misconfigurations are the Achilles’ heel of IoT security. They are responsible for a significant portion of breaches yet are often overlooked in favour of more complex vulnerabilities.
2. Default credentials and open ports are low-hanging fruit for attackers. Basic hygiene like changing default passwords and closing unnecessary ports can mitigate many risks.
3. Visibility is key. Shadow IoT devices and poorly documented systems create blind spots in networks, increasing misconfiguration risks.
4. Automation tools can help. Leveraging AI-powered tools to scan for misconfigurations can drastically reduce human error and enhance overall security.
5. Holistic security approaches are essential. It’s not just about securing the device but also the network, cloud backend, and protocols it interacts with.

What Can We Do About It?

• Educate users and organisations: Many IoT vulnerabilities are avoidable with basic awareness and training.
• Adopt strong device management: Organisations must maintain visibility into connected devices and regularly audit configurations.
• Advocate for secure defaults: Manufacturers should ship devices with security-first configurations, minimising user effort.
• Regulate and enforce standards: Policies like the EU Cyber Resilience Act (CRA)can incentivise better practices in device manufacturing and deployment.

Misconfigurations in IoT are often ignored until it’s too late. By understanding the scale of the issue and taking proactive steps, we can prevent the next wave of attacks and secure the interconnected future we envision.

What do you think? Are organisations ready to face this misconfiguration pandemic?