Specialized, service optimized virtual machines are assigned to handle specific types of Internet of Things (IoT) devices. An IoT context mapping policy engine within the context of a virtualized network function manages IoT context mapping policy functions in load balancers. The IoT context mapping policy functions select service optimized virtual machines based on IoT device IDs, and assign those virtual machines to handle the devices. The IoT context mapping policy functions provide load data to the IoT context mapping policy engine. Based on the load data, the IoT context mapping policy engine maintains appropriate scaling by creating or tearing down instances of the virtual machines.