The enterprise customers are seeking evidence of the security measures and risk management processes in place for their growing businesses through software-as-a-service (SaaS). Two widely recognized compliance frameworks are SOC 2 and ISO 27001.
While these frameworks may have similar operational areas, they differ greatly when it comes to the scope and assessment process. Therefore, it is vital to differentiate between these two frameworks as they will help SaaS startups make better decisions.
| Feature | SOC 2 | ISO 27001 |
|---|---|---|
| Standard Type | Attestation Report | International Certification Standard |
| Developed By | AICPA | ISO (International Standards Organization) |
| Areas Addressed | Security and Operational Effectiveness | Information Security Management System |
| Geographic Relevance | Primarily North America | Worldwide |
| Assessment Output | SOC 2 Report | ISO 27001 Certificate |
| Audit Cycle | Yearly | Certification + Surveillance Audit annually |
| Good Fit for | Software-as-a-Service and technology firms serving US clients | Companies with worldwide clients |
| Duration of Compliance | Single point of time or over a period | Normally 3 years with surveillance annual |
SOC 2 standards have been established by the American Institute of Certified Public Accountants (AICPA). This certification is aimed at making sure companies process their customers’ data properly.
Many enterprises implement SOC 2, such as software companies and technology providers for large-scale corporations.
Today there exist two types of SOC 2:
Represents a point-in-time evaluation. Here an auditor reviews controls implemented in a company. It is a cheaper and faster version.
This is a more thorough process. An auditor evaluates controls in operation over some timeframe ranging from three to twelve months. Large enterprises tend to choose SOC 2 Type II.
Interested in achieving SOC 2 complianceInterested in achieving SOC 2 compliance?
ISO 27001 is an international standard for the improvement of an organization’s ISMS.
ISO 27001 is not simply about controls, it demands that organizations have a good management framework, where risks are identified and the right controls are implemented.
Risk based approach is used by ISO 27001.
SOC 2
The organization will have to obtain an independent assessment which measures the effectiveness and design of controls in compliance with the Trust Services Criteria.
ISO 27001
After conducting an accredited certification audit, the company will get a globally recognized certificate.
Important Factor: While SOC 2 gives an attestation report which is necessary for North American customers, ISO 27001 will give a globally recognized certificate stating the presence of an ISMS.
SOC 2
Emphasizes on security controls and the operating procedures of the organization, focusing on proving that the controls are effective throughout the period.
ISO 27001
Centers on ensuring the successful implementation and maintenance of an ISMS through a risk management approach.
Key Aspect: SOC 2 concentrates on operational efficiency whereas ISO 27001 is centered around information security management.
SOC 2
Often demanded by:
Companies that are evaluating security of their vendors
ISO 27001
Often demanded by:
Key Point: The customer requirements will generally be determined based on their geographic locations and industry.
SOC 2
Gives flexibility to companies as far as designing and implementing controls that will satisfy the criteria of trust services.
ISO 27001
Needs a documented and organized management process.
Key Point: SOC 2 allows more flexibility in control testing while ISO 27001 requires a clear process to be established within an organization to manage information security.
| Audit Element | SOC 2 | ISO 27001 |
|---|---|---|
| Phase of Preparation | Gap Assessment | ISMS Development |
| Document Requirement | Moderate | Extensive |
| Requirement for Risk Assessment | Recommended | Compulsory |
| Internal Audit | Recommended | Required |
| Certificate Issuing Agency | CPA Firms | Certifying Bodies |
| End Product | Report | Certificate |
Compliance costs will depend on business size, complexity, number of employees, and the level of security maturity.
| Stages of Company Growth | Estimated SOC 2 Cost | Estimated ISO 27001 Cost |
|---|---|---|
| Start-up Stage | Low | Medium |
| SaaS Growth Stage | Medium | Medium to High |
| Large Enterprise | High | High |
SOC 2
2–4 weeks
1–3 months
1–2 months
2–6 months
ISO 27001
2–6 weeks
2–6 months
1–3 months
4–12 months
Select ISO 27001 When
Operations are conducted globally
ISO certification is specifically requested by the client
You desire a proper framework for security management
Additional security certifications will be pursued
The organization has well-developed governance procedures
Yes.
This is because SOC 2 and ISO 27001 share many overlapping controls and requirements, which is why many SaaS firms attempt to achieve both certifications simultaneously.
Advantages of doing both SOC 2 and ISO 27001 include:
Security requirements for ISO 27001 may also fulfill the criteria of SOC 2.
Choose SOC 2 first.
Continue
Choose ISO 27001.
Continue
Consider implementing both SOC 2 and ISO 27001.
SOC 2 may be sufficient initially.
SOCLY.io assists startups and SaaS businesses in streamlining their compliance process through:
We ensure your compliance process is completed quickly without interfering with your operations.
Both are equally important since one is preferred by SaaS customers based in the USA, while ISO 27001 gives global accreditation.
Certainly, as SaaS start-ups often go for SOC 2 because it is generally asked for in enterprise sales cycles.
Many of them are covered, yet ISO 27001 compliance does not guarantee all the SOC 2 requirements are met.
Most companies manage to achieve this goal in 2-6 months depending on the level of implemented security controls.
Yes, there are software solutions that enable you to meet multiple compliance standards with the same controls and evidence.
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