A server of a distributed cloud computing network receives, over a tunnel established between a customer-premises equipment and the compute server, traffic from an Internet-of-Things (IoT) device that is connected to the CPE. The server enforces an egress traffic policy to determine whether the traffic is permitted to be transmitted to the destination. If the traffic is not permitted to be transmitted to the destination, the server drops the traffic. If the traffic is permitted to be transmitted to the destination, the server transmits the traffic to the destination.