Northern.tech has released its inaugural State of Industrial IoT Device Lifecycle Management report. Drawing on insights from over 500 embedded professionals across industries, the report reveals how OEMs are navigating the shift to a software-centric economy — and the operational, cultural, and compliance challenges that come with it.
As IoT adoption grows, the ability for OEMs to manage and support their connected, smart products securely and efficiently across the full lifecycle is emerging as a key differentiator. The report offers a clear look at how organisations are progressing and where critical gaps remain.
Key findings include:
- Security and time-to-market are ranked equally as top business priorities — but most organisations struggle to balance both
- Only one-fifth of OEMs are currently implementing a compliance plan for the EU Cyber Resilience Act, despite penalties being only 20 months away
- Nearly half of product launch delays are caused by software issues like bugs, deployment problems, and new security patches
- Device lifecycle management (DLM) is still immature across the market, with more than a third of organisations citing prioritisation at the top roadblock to establishing an explicit DLM process
OEMs struggle to adopt a digital mindset
Traditional, physical-product-based strategies are no longer sustainable in an era where software dictates innovation and customer retention. As software becomes the primary driver of product value, managing connected devices across their lifecycle becomes increasingly complex. From updates and vulnerability patching to compliance and support, OEMs must rethink their approach to embedded systems and product development, maintenance and support throughout the product lifecycle, and managing customer relationships beyond the point of sale.
“The shift to software-defined products requires more than just an acknowledgement,” said Eystein Stenberg, Co-Founder and CTO of Northern.tech. “It demands mature, secure, and scalable infrastructure to support real-world complexity, whether you’re managing a fleet of industrial robots or millions of connected medical devices.”
OEMs must adopt software-first approaches to product design, development, and long-term management while adapting their revenue models to support the ongoing requirements of software-based products. At the same time, OEMs need to refine their strategies to avoid the software development pitfalls causing nearly half of launch delays and fully capitalise on software-driven growth.
Bridging the compliance and cybersecurity gap
While awareness around cybersecurity and regulatory mandates is high, execution remains a challenge. “Security and compliance can’t be afterthoughts,” said Stenberg. “They need to be baked into the full product lifecycle—from design to deployment and beyond.”
The report outlines a significant maturity gap in IoT security strategies. While more than half of respondents claim to comply or plan to comply with cybersecurity regulations, nearly one-fifth admit they have no compliance plan, and almost another fifth are unsure of which regulations or standards they need to comply with. Regarding vulnerability remediation, under one-quarter of OEMs can deploy a security update within weeks, highlighting a disconnect between perceived readiness and actual incident response capabilities.
Supporting the IoT ecosystem with actionable insights
As IoT and connected devices continue on their path of growth and significance, OEMs are slowly but certainly recognising the strategic need to adapt. The acceleration toward a software-centric economy requires OEMs to navigate new technical, operational, cultural, and strategic hurdles to remain competitive while generating business value.
This report aims to support OEMs with benchmarking their progress, understanding emerging risks, and exploring the strategies teams are using to embrace and compete in a software-first economy.
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