In today’s cybersecurity landscape, companies are under increasing pressure to prove the strength and reliability of their internal controls, especially as it relates to data privacy and information security. Two of the most widely recognized frameworks in the industry are SOC 2 and ISO 27001. Although they serve similar goals—demonstrating a commitment to protecting sensitive information—they have distinct approaches and operational focuses. A common question among startups and growing enterprises is: Which one should come first?
What Is SOC 2?
SOC 2, or Service Organization Control 2, is a compliance framework developed by the American Institute of Certified Public Accountants (AICPA). It assesses how well a company manages data based on five “Trust Services Criteria”: Security, Availability, Processing Integrity, Confidentiality, and Privacy. SOC 2 is particularly relevant for technology and cloud-based service providers that handle customer data.
The resulting SOC 2 audit report reassures clients that a service provider has appropriate safeguards in place to manage and protect data. It’s specific to each organization and tailored to the services they offer, making it flexible but somewhat variable across companies.
What Is ISO 27001?
ISO 27001 is an international standard for information security management systems (ISMS). Developed by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC), the framework takes a comprehensive, risk-based approach to securing sensitive data across all areas of an organization.
The certification process assesses an organization’s ability to establish, implement, maintain, and continuously improve an effective information security management system. ISO 27001 is recognized globally and is suitable for organizations of any size and in any industry. The standard obliges businesses to systematically examine their information security risks, take account of threats and vulnerabilities, and then mitigate those risks strategically.
Key Differences Between SOC 2 and ISO 27001
Though both standards demonstrate a commitment to cybersecurity, there are key differences between them:
- Geography: SOC 2 is primarily used in the United States while ISO 27001 is internationally recognized.
- Certification vs. Attestation: SOC 2 is an attestation report provided by a CPA firm, while ISO 27001 results in a formal certification issued by an accredited certification body.
- Focus: SOC 2 centers on operational controls related to data processing and privacy. ISO 27001 focuses on the broader establishment and maintenance of a security management system.
- Flexibility: SOC 2 is highly customizable based on the criteria an organization chooses, whereas ISO 27001 follows a more prescribed approach based on its clauses and Annex A controls.
Which Should Come First?
The decision on whether to pursue SOC 2 or ISO 27001 first depends on several factors including business goals, customer expectations, and market presence. However, in general, many growing tech companies opt for SOC 2 first for the following reasons:
1. Speed to Market
The SOC 2 process, especially a Type I report, can typically be completed faster than an ISO 27001 certification. Type I assesses controls at a point in time, which means fewer requirements for long-term evidence collection. This makes SOC 2 an attractive option for startups and businesses wanting to quickly gain customer trust during early growth phases.
2. Customer Expectations
In North America, specifically the United States, many enterprise clients require SOC 2 compliance before entering into partnerships or deals. If your primary customer base is domestic, SOC 2 may align more closely with market expectations.
3. Resource Allocation
For startups with limited staff and budget, the relatively less complex process of securing a SOC 2 Type I report offers a level of legitimacy in the short term. Once a foundation is established, they can shift toward the more comprehensive ISO 27001 framework as the organization matures.
When ISO 27001 Should Come First
There are scenarios where ISO 27001 is the better starting point. These include:
- International Reach: If the company operates globally or plans to expand internationally, ISO 27001’s worldwide recognition adds greater value with global customers.
- Mature Organizations: Larger, established companies with defined processes may benefit from ISO 27001’s structured approach to risk management and governance.
- Internal Improvement: Organizations seeking to integrate security deeply into their operations often favor ISO 27001 first because of its exhaustive approach to managing information security risk.
Compliance Synergy: Doing Both
While it may seem like an either-or decision, many companies ultimately pursue both SOC 2 and ISO 27001 for well-rounded assurance. There is considerable overlap between the two standards—in fact, achieving ISO 27001 certification can make obtaining SOC 2 compliance easier, and vice versa.
For instance, both share common control requirements such as access management, risk assessment, incident response, and physical security. Companies who have already implemented control frameworks like NIST or CIS may find overlapping efficiencies when pursuing both standards in a coordinated manner.
Combining Timelines Strategically
An effective strategy used by many companies is to start with a SOC 2 Type I, progress to SOC 2 Type II over 6-12 months, and then initiate ISO 27001 implementation once internal security and governance controls are stabilized. This bottom-up approach allows for rapid compliance while laying the groundwork for stronger, long-term cybersecurity operations.
Final Thoughts
Choosing between SOC 2 and ISO 27001 isn’t about picking a “better” standard, but about aligning with strategic goals, customer demands, and market geography. SOC 2 offers speed and flexibility, making it ideal for SaaS companies in early growth, especially in the U.S. ISO 27001 brings a global stamp of credibility and process maturity that becomes increasingly important as organizations scale.
Whichever you choose, starting the compliance journey prepares your organization for sustainable growth, builds trust with clients, and reduces the risk of data breaches and non-compliance penalties.
Frequently Asked Questions (FAQ)
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Is SOC 2 a certification?
No, SOC 2 provides an attestation report issued by an independent CPA firm. It is not a certification like ISO 27001. -
Can SOC 2 and ISO 27001 be pursued together?
Yes, many organizations pursue both, often in a staggered approach. They complement each other and share overlapping controls. -
How long does it take to become ISO 27001 certified?
It typically takes 6 to 18 months, depending on the organization’s size and existing security maturity. -
What is a SOC 2 Type I vs. Type II?
A SOC 2 Type I report evaluates the design of controls at a specific point in time, while Type II assesses their effectiveness over a period (usually 3 to 12 months). -
Does ISO 27001 cover privacy regulations like GDPR?
While ISO 27001 does not directly ensure GDPR compliance, it supports related controls that help address data protection and privacy laws.
