Industry executives and experts share their predictions for 2026. Read them in this 18th annual VMblog.com series exclusive.
By Landon Reese, VP Product Management, Digi International
As organizations expand connected operations across regions, devices, and networks, the challenges of deploying and managing IoT infrastructure continue to grow. What once worked for smaller or localized environments is increasingly strained by geographic scale, inconsistent connectivity, and constant threat of attack. Looking ahead to 2026, enterprises will need to rethink how to build connectivity, intelligence, and security into distributed systems from the start.
To prepare for IoT expansion, organizations must focus on three key areas: ensuring reliable global connectivity, deploying smarter edge processing, and integrating strong security measures. In 2026, mastery of these shifts will become essential for future readiness.
eSIM Will Become the Preferred Standard for IoT Connectivity
By the end of 2026, eSIM is expected to move from an emerging option to the preferred standard for new cellular-connected devices. Many organizations still rely on physical SIM cards tied to a single carrier, an approach that becomes increasingly difficult to manage as deployments expand across regions with varying network performance. Different locations often require different carriers to achieve acceptable coverage, forcing teams to manage multiple SIM types, staging processes, and on-site provisioning.
The transition to SGP. 32, the latest GSMA standard, helps remove many of these constraints. It simplifies the management of connectivity profiles and enables greater flexibility without requiring physical SIM changes. This allows organizations to deploy devices more efficiently, adapt connectivity as conditions change, and reduce the need for manual field intervention.
As a result, zero-touch deployment becomes more achievable, operational overhead is reduced, and connectivity strategies can be optimized over time rather than locked in at deployment. With these benefits, eSIM adoption is expected to accelerate and become a baseline requirement for new industrial, enterprise, and infrastructure deployments. As enterprises evaluate this shift, connectivity providers such as Digi are seeing firsthand how eSIM simplifies global deployments by reducing physical provisioning and enabling greater flexibility across carriers.
More Intelligence Will Move Closer to the Edge
While many analytics and management functions have traditionally been centralized, organizations are increasingly pushing more decision-making closer to where data is generated. In 2026, this shift toward edge-based intelligence is expected to accelerate, driven by practical concerns such as cost, latency, reliability, and the need to operate effectively even when cloud connectivity is limited.
Rather than sending all raw data back to centralized systems, edge devices are beginning to evaluate conditions locally and determine when action or reporting is necessary. For example, a device can recognize whether changes in performance, temperature, or network quality represent a real issue or normal behavior for that specific location. This reduces unnecessary alerts and enables operations teams to focus on situations that actually require attention.
At the same time, organizations will increasingly experiment with small language models (SLMs) and other machine learning models at the edge to support more adaptive, real-time decision-making. These models can help interpret local conditions, detect anomalies, and inform automated responses without relying exclusively on centralized AI systems.
As AI capabilities move closer to the edge, devices will need to be designed with sufficient compute capacity and cloud management extensibility to deploy, update, and secure these models over time. This includes the ability to manage model lifecycles, apply updates remotely, and ensure that AI workloads remain protected as threats and requirements evolve.
In networked environments, this approach can help operators better understand performance trends, identify emerging issues, and respond more efficiently without relying solely on dashboards or manual analysis. While centralized systems remain important, distributing intelligence across edge infrastructure supports more scalable and resilient operations. Human oversight will continue to play a critical role, but the balance between centralized control and local decision-making is clearly shifting.
Security Will Become a Primary Buying Criterion for Connected Infrastructure
In 2026, security will no longer be viewed as a differentiator-it will be an expectation. As connected systems become more critical to operations and more exposed to risk, organizations will increasingly reject solutions that treat security as an add-on or afterthought.
As security expectations rise, enterprises are increasingly prioritizing solutions that can demonstrate independently audited, ongoing controls-such as SOC 2 Type 2 compliance-which validates that security, availability, and confidentiality practices are consistently enforced over time, not just documented at a single point. This level of third-party attestation is becoming a baseline requirement for connected infrastructure supporting regulated and mission-critical environments.
Enterprises will expect security to be built into devices, software, and management processes from the outset, with clear mechanisms for updates, vulnerability remediation, and long-term maintenance. This reflects a broader change in how infrastructure is evaluated. Security is moving to the top of purchasing criteria, particularly for deployments that support critical services or operate at scale.
Solutions that cannot demonstrate how they are designed, maintained, and updated to address evolving threats will struggle to gain traction. As discussed during the sourcing conversations, security is on track to become one of the most influential factors in how organizations select and deploy connected infrastructure.
Looking Ahead
Overall, these trends indicate that the IoT landscape will demand flexible connectivity (eSIM), efficient local intelligence at the edge, and robust security as standard. Organizations should prioritize these areas to build adaptable, resilient, and trustworthy infrastructure by 2026.
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ABOUT THE AUTHOR
Landon Reese is a product leader who drives significant revenue and valuation impacts through product creation and optimization. With over 15 years of experience in Product, Tech, and IT across several industries, he excels at building high performing product teams, setting and executing clear strategies across the business, and building the right products at the right time to drive growth.
