How Do You Deploy Microsoft Defender for IoT?

Here’s a frightening stat: 70% of IoT devices have serious security vulnerabilities.

Given their unique protocols, unencrypted connections, and proprietary operating systems, these devices are prime targets for cyberattacks.

Microsoft Defender for IoT offers incredible protection for OT and ICS systems.

But what does it take to deploy D4IoT—and what options do you have?

Here’s everything you need to know.

Key takeaways:

• Defender for IoT should be deployed out-of-band, never inline, to avoid overloading sensitive OT devices.
• D4IoT implementations must use a cloud or hybrid model.
• D4IoT is especially powerful when integrated with Microsoft Sentinel/Defender XDR. In this scenario, your SOC team (or MSP) gets full visibility across IT and OT environments.

How do you deploy Microsoft Defender for IoT?

The deployment process for Defender for IoT is fairly straightforward. Here’s the process we engage with our clients at Corsica Technologies.

1. Plan network visibility. We identify critical network segments and protocols, then decide where to place sensors (SPAN ports or TAPs on managed switches or aggregation points).
2. Install OT network sensors. We deploy sensors out-of-band, never inline, to monitor mirrored traffic without disrupting the devices under management. We also configure SPAN and/or TAP sessions to feed traffic from relevant VLANs or ports. Sensors can be hardware or virtual (supporting Microsoft Hyper-V and VMware ESX). Sensors can be sized from XS (100 devices) to XL (5,000 devices) in five discrete capacity-based specifications.
3. Integrate with security tools. Microsoft recommends a cloud or hybrid model for D4IoT, which opens up several beneficial integration opportunities. Depending on the customer’s needs, we integrate D4IoT with Microsoft Sentinel and/or ticketing systems for integrated security visibility and process flow.

In all implementations, it’s important to start with a visibility assessment before enabling alerting. This ensures that every device requiring protection is actually included in the scope of monitoring.

It’s also important to size sensors correctly for the traffic volume. Historical data is helpful here—or we can assess current network traffic to determine your needs.

What are the main building blocks of Defender for IoT?

Several key components work together to support the functionality of Defender for IoT. Here are the primary building blocks of the solution.

1. Network sensors

• Purpose: Passive monitoring of network traffic for IoT/OT devices.
• Deployment: Connected to SPAN (or MIRROR) ports or network TAPs to capture traffic without impacting operations.
• Functionality: Detects vulnerabilities, anomalies, and threats using deep packet inspection and protocol analysis.

2. Cloud integration (Azure)

• Purpose: Extends monitoring and analytics to the cloud.
• Components:
  • Microsoft Defender for IoT in Azure provides advanced threat intelligence and integration with Azure Security Center, including pro-active scanning of device firmware updates.
  • Azure Sentinel Integration enables SIEM capabilities for incident response and correlation across IT and OT networks.
• Benefits: Scalable analytics, threat intelligence updates, and unified security visibility.

3. Threat intelligence and analytics

• Purpose: Uses Microsoft’s global threat intelligence to detect emerging threats.
• Functionality: Continuous updates to detection engines and threat behavioral models.

4. APIs and integrations

• Purpose: Connects Defender for IoT with third-party tools like SIEM, other SOC tools, and ticketing systems.
• Examples: Splunk, QRadar, ServiceNow.

What data does the OT sensor actually collect?

A D4IoT sensor collects all wire-line data from the device where it’s installed. It monitors the device through deep packet inspection of mirrored traffic. The sensor doesn’t actually interact with the device itself, which keeps it from impacting OT network traffic in any way.

Here’s the data that a D4IoT sensor collects.

1. Device and asset information: The sensor records IP and MAC addresses, device type and vendor, and firmware and OS versions. It also records serial numbers, hardware details, network topology, and device relationships.
2. Network traffic metadata: The sensor gathers data on protocols used (e.g., Modbus, OPC UA, DNP3, BACnet), session details, communication patterns, and any unusual or unauthorized connections.
3. Operational data: The sensor records commands and function actions in OT protocols, process values like sensor readings and actuator states, configuration changes, and authentication attempts, whether successful or failed.
4. Security status indicators: The sensor gathers data on known vulnerabilities (based on device fingerprinting), anomalous behavior, malware signatures, exploit attempts, and policy violations like unauthorized remote access.
5. Security event and alert data: The sensor detects threats (following the MITRE ATT&CK framework for ICS mapping). It also detects suspicious traffic patterns and indicators of potential lateral movement within the OT network.

How does Defender for IoT handle duplicate IP ranges?

Duplicate IP ranges are common in OT environments, as many industrial sites use overlapping private IP spaces. Luckily, Defender for IoT is built to handle duplicate IP ranges without any issues. It does so through site-based segmentation and sensor-level isolation.

Here’s how it works in detail.

Site-based architecture

Each OT sensor is assigned to a specific site in Defender for IoT. Sites act as logical boundaries, so IP addresses are interpreted in the context of their site. This prevents conflicts when multiple sites use the same IP ranges.

Sensor-level isolation

Sensors only monitor traffic within their connected network segment. Duplicate IPs across different sensors do not collide because data is associated with the specific sensor and site.

Device identification beyond IP

Defender for IoT uses multi-factor fingerprinting (for example, MAC address, protocol behavior, and device type) to uniquely identify devices. This ensures accurate asset inventory even when IP addresses overlap.

Management console

When data is aggregated in the cloud or on-prem console, the site context is preserved. Dashboards and alerts always reference the site, avoiding ambiguity.

Can the sensor impact the performance of our OT network?

No. A Defender for IoT sensor doesn’t impact OT network performance.

The sensor engages in passive monitoring only. It uses SPAN ports or network TAPs to receive a copy of the traffic associated with the device. The sensor doesn’t inject packets, modify traffic, or sit inline, so it can’t introduce latency or cause downtime.

To put it another way, D4IoT is an agentless security solution. It doesn’t install software on OT devices. Rather, it analyzes mirrored traffic to and from devices. It doesn’t consume any of the limited computing power of these devices.

How are network sensors actually deployed in production OT networks (SPAN/TAP placement, VLAN coverage, inline vs out-of-band) without disrupting industrial processes?

D4IoT sensors are deployed using an out-of-band architecture model. Sensors never operate inline with traffic. Rather, they operate passively, receiving mirrored traffic from switches through one of two methods:

• SPAN (or MIRROR) ports can be configured on network switches to mirror traffic from selected VLANs or ports.
• Network TAPs can act as dedicated hardware devices for this purpose, copying traffic without introducing latency or failure points.

When it comes to multiple VLAN coverage, SPAN sessions can be configured to mirror traffic from those VLANs. Large environments may need aggregation switches or multiple sensors to cover all network segments. Some network topologies may enable trunking of SPAN ports between switch stacks for additional aggregation.

What is the difference between the OT/ICS sensor, the enterprise IoT (agentless) discovery via Defender for Endpoint, and the embedded device agent options in Defender for IoT?

Between Defender for IoT and Defender for Endpoint, Microsoft offers two different approaches to discover connected devices and secure them across OT and IoT environments.

• An OT/ICS network sensor is a passive, agentless solution that passively monitors OT devices by analyzing mirrored traffic.
• Enterprise IoT Discovery via Defender for Endpoint is an agentless discovery method for IoT devices in IT networks. It uses existing Defender for Endpoint agents on Windows endpoints to scan network traffic and identify unmanaged IoT devices.

Here’s how the two recommended methods compare.

As you can see, the OT/ICS sensor approach is far more comprehensive than the mere device discovery offered by Defender for Endpoint.

How can I monitor traffic from an unmanaged switch, or if I have a ring topology?

Defender for IoT offers great options for dealing with these unique networking scenarios. Here are your options.

Unmanaged switch

If the switch doesn’t support SPAN, you can install a network TAP between the unmanaged switch and its upstream switch or router. This TAP can copy traffic to the D4IoT sensor without affecting operations.

If that approach isn’t a good fit, you can mirror traffic from the upstream managed switch that connects to the unmanaged switch. This gives you visibility into all devices behind the unmanaged switch.

Ring topology

Place the sensor at a central aggregation point or core switch where the ring connects to the broader network. Configure SPAN sessions on that switch to mirror traffic from all ring ports. If the ring uses managed switches, you can SPAN from multiple switches and aggregate feeds into the sensor.

For very large rings, consider multiple sensors or traffic aggregation devices. If you have especially complex topologies, Microsoft recommends network visibility planning to ensure full security coverage for all devices monitored by D4IoT.

Do I have to be an Azure customer to use Microsoft Defender for IoT, or can I deploy it entirely on-premises?

Existing (legacy) on-premises deployments of D4IoT can continue to function. However, note that Microsoft stopped providing support, updates, and bug fixes for on-premises (legacy) consoles on January 1, 2025.

Also note that new sensors produced after 2025 can’t connect to legacy on-premises management consoles.

For new deployments of D4IoT, Microsoft recommends cloud or hybrid architectures. Here’s what that looks like in detail.

Deploying D4IoT in a hybrid, cloud-connected model

If you connect D4IoT to Azure, you gain centralized visibility across multiple sites and advanced threat intelligence updates. In this model, you can also integrate D4IoT with Microsoft Sentinel, Microsoft Defender XDR, and other Azure security services.

This approach is a great fit for organizations that need unified security monitoring, reporting, and threat analysis and response across OT and IT networks.

What has changed after the legacy on‑prem management console was retired in 2025?

Microsoft retired the legacy on-premises management console for D4IoT on January 1, 2025. New sensors produced after that date can’t connect to the legacy on-prem console. Existing sensors can continue connecting to the on-prem console, but the console is now unsupported and will receive no maintenance from Microsoft.

Note that air-gapped deployments continue to function normally. The sensor UI, CLI, and local data processing remain available, and you can manage sensors directly via sensor console, CLI, or third-party APIs such as SIEM integrations.

Here’s a summary of what has changed and what remains the same.

The takeaway: Don’t leave your OT/ICS devices unsecured

OT networks and devices present unique security challenges, but Microsoft Defender for IoT solves these problems. The key is to implement the solution in a way that fits your network and your operations. If you need help with D4IoT, get in touch. Our Microsoft security experts are standing by to build a comprehensive plan to protect your critical equipment.

Ready to solve your OT security challenges?

Reach out to schedule a consultation with our Microsoft D4IoT specialists.

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