SOC 2 vs ISO 27001: Which Certification Do You Need?

You're selling to enterprise customers. Security questionnaires start rolling in. Half ask for SOC 2, half ask for ISO 27001. Some ask for both. Which one do you actually need?

The Quick Answer

• Selling primarily to US customers? Get SOC 2 first.
• Selling to EU/UK customers? Get ISO 27001 first.
• Selling globally? You probably need both eventually.
• Limited budget? Start with SOC 2 (faster, cheaper, easier).

Here's the complete breakdown so you can make an informed decision.

SOC 2 vs ISO 27001: Side-by-Side Comparison

Factor	SOC 2	ISO 27001
Geography	US-centric	International (EU/UK focus)
Type	Audit/attestation	Certification
Framework	Principles-based, flexible	Prescriptive, 93 required controls
Scope	Choose specific services/systems	Entire ISMS (all company operations)
Cost	$15K-$450K for Type 2	$25K-$150K for certification
Timeline	3-20 months	6-18 months
Observation Period	3-12 months (Type 2)	3 months minimum
Renewal	Annual surveillance audit	Annual surveillance + 3-year recertification
Report Privacy	Confidential (share under NDA)	Public certificate
Auditor	CPA firm (AICPA member)	Accredited certification body

What is SOC 2?

SOC 2 (System and Organization Controls 2) is an auditing framework developed by the AICPA (American Institute of CPAs) that evaluates how service organizations manage customer data based on five Trust Service Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy.

Key characteristics:

• US-focused: Primarily recognized and required by US enterprise customers
• Flexible scope: You choose which systems/services to include and which TSC to cover
• Audit, not certification: You receive a report, not a certificate. It's confidential.
• Type 1 vs Type 2: Point-in-time (Type 1) vs over-time effectiveness (Type 2)
• Annual renewal: Most companies do annual Type 2 audits to maintain coverage

What is ISO 27001?

ISO 27001 is an international standard for Information Security Management Systems (ISMS) published by the International Organization for Standardization (ISO). It provides a systematic approach to managing sensitive company information.

Key characteristics:

• International: Globally recognized, especially strong in EU, UK, and Asia-Pacific
• Prescriptive controls: 93 security controls in Annex A that must be addressed
• ISMS required: Must implement a full Information Security Management System
• Certification: You receive a public certificate that can be displayed on your website
• 3-year cycle: Annual surveillance audits plus full recertification every 3 years

Cost Comparison

SOC 2 Costs

• Type 1: $12,000 - $160,000
• Type 2: $15,000 - $450,000
• Annual surveillance: 60-70% of initial cost
• GRC tools: $12K-$60K/year

ISO 27001 Costs

• Initial certification: $25,000 - $150,000
• Annual surveillance: $10,000 - $40,000
• 3-year recertification: $15,000 - $60,000
• Consultant fees: $20K-$80K (often needed for first-time)

Bottom line: SOC 2 specialist auditors ($15K-$75K) are often cheaper than ISO 27001 for small companies. ISO 27001 becomes more cost-effective for larger organizations pursuing both certifications.

Timeline Comparison

SOC 2 Timeline

1. Readiness: 1-4 months
2. Observation period: 3-12 months (Type 2 only)
3. Audit and reporting: 1-3 months
4. Total: 3-20 months (typically 6-12 for Type 2)

ISO 27001 Timeline

1. ISMS implementation: 3-6 months
2. Internal audits: 1-2 months
3. Stage 1 audit (documentation review): 2-4 weeks
4. Stage 2 audit (certification audit): 2-4 weeks
5. Total: 6-18 months (typically 9-12 months)

Winner for speed: SOC 2 with specialist auditor (3-6 months possible for Type 1, 6-10 months for Type 2)

Geographic Preference

SOC 2 is Preferred In:

• United States (90%+ of requests)
• Canada (strong preference)
• Australia (common, along with ISO 27001)

ISO 27001 is Preferred In:

• European Union (Germany, France, Netherlands)
• United Kingdom
• Asia-Pacific (Singapore, Japan, Australia, New Zealand)
• Middle East

Reality check: US companies expanding to EU almost always need both. EU companies selling to US enterprise often need both.

Control Framework Comparison

SOC 2: Principles-Based

SOC 2 is flexible. You design controls based on the Trust Service Criteria that fit your business model. Two companies can have completely different SOC 2 implementations and both be compliant.

Example: A SaaS company might have 50 controls, while a data center might have 200. Both valid.

ISO 27001: Prescriptive

ISO 27001 provides 93 controls in Annex A that you must evaluate. You can exclude controls if they're not applicable (with justification), but the framework is more prescriptive.

Example: ISO 27001 specifically requires policies for remote working, cryptography, supplier relationships, etc.

Which is easier? SOC 2 is generally easier for small companies because you can start with Security-only and minimal scope. ISO 27001 requires a broader ISMS covering all company operations.

Report Privacy

SOC 2: Confidential Reports

• SOC 2 reports are confidential
• Share only under NDA with customers, prospects, partners
• Cannot post publicly or market broadly
• Gives you control over who sees detailed findings

ISO 27001: Public Certificates

• ISO 27001 certificates are public
• Can display on website, marketing materials, email signatures
• Certificate number is searchable in public databases
• Better for marketing and brand building

Marketing value: ISO 27001's public certificate is better for general marketing. SOC 2 is better for detailed security due diligence.

When to Choose SOC 2

Choose SOC 2 if:

• Your primary market is the United States
• You're a SaaS, cloud, or technology service provider
• Customers are asking specifically for SOC 2 in RFPs
• You want faster time to certification (3-10 months possible)
• You prefer flexible, principles-based compliance
• You want to limit scope to specific services/systems
• You're a startup with limited resources ($15K-$40K budget)

When to Choose ISO 27001

Choose ISO 27001 if:

• Your primary market is EU, UK, or Asia-Pacific
• Customers specifically request ISO 27001
• You want a public certificate for marketing purposes
• You're building an ISMS for organizational maturity (not just compliance)
• You need prescriptive controls framework (not starting from scratch)
• Your industry favors ISO (manufacturing, healthcare, government)

Can You Get Both?

Yes, and many companies do. Here's how to approach it:

Strategy 1: Sequential (SOC 2 First)

1. Get SOC 2 first (faster, cheaper, unblocks US sales)
2. Use SOC 2 controls as foundation for ISO 27001
3. Add ISO 27001 12-18 months later when expanding to EU/UK

Timeline: 6-10 months SOC 2, then 6-9 months ISO 27001

Cost: $20K-$60K SOC 2 + $30K-$80K ISO 27001 = $50K-$140K total

Strategy 2: Sequential (ISO 27001 First)

1. Get ISO 27001 first (if EU market is primary)
2. Leverage ISO controls for SOC 2 preparation
3. Add SOC 2 when entering US market

Timeline: 9-12 months ISO 27001, then 4-6 months SOC 2

Strategy 3: Parallel (Both at Once)

1. Implement controls that satisfy both frameworks
2. Run audits concurrently or back-to-back
3. Leverage shared evidence and documentation

Timeline: 9-15 months for both

Cost savings: 20-30% vs doing separately

Effort: High internal resource requirement

Bundle Discount Auditors

Some auditors (especially UK-based) offer bundled SOC 2 + ISO 27001 packages:

• ISO Pro Solutions (UK): 20% discount for bundle
• Schellman: Multi-framework pricing
• A-LIGN: Combined engagements available

Control Overlap

Good news: 60-70% of controls overlap between SOC 2 and ISO 27001. If you implement controls for one, you're mostly prepared for the other.

Shared Controls Include:

• Access control policies (authentication, authorization, MFA)
• Encryption (data at rest and in transit)
• Vulnerability management (patching, scanning)
• Incident response procedures
• Change management processes
• Vendor risk management
• Security training programs
• Physical security controls
• Logging and monitoring

SOC 2-Specific Requirements:

• System description narrative
• Trust Service Criteria mapping
• Type 1 vs Type 2 considerations

ISO 27001-Specific Requirements:

• ISMS scope definition and boundaries
• Risk treatment plans
• Statement of Applicability (SoA)
• Internal audit program
• Management review meetings
• Documented ISMS procedures

Industry Preferences

Industries that Prefer SOC 2:

• SaaS: 90%+ of US SaaS customers require SOC 2
• Cloud Infrastructure: AWS, GCP competitors need SOC 2
• FinTech: US financial services customers prefer SOC 2
• API/Integration Platforms: SOC 2 is standard

Industries that Prefer ISO 27001:

• Manufacturing: ISO family of standards is familiar
• Healthcare (EU): ISO 27001 aligns with GDPR
• Government contractors: ISO 27001 often required
• Telecommunications: Industry standard globally

Decision Framework

Answer these questions to decide:

1. Where are your customers? US = SOC 2, EU/UK = ISO 27001
2. What do RFPs ask for? Follow customer requirements
3. What's your timeline? Need it fast? SOC 2 is quicker with specialist auditors
4. What's your budget? Limited budget? Start with SOC 2 Security-only
5. Do you want public marketing? ISO 27001 certificate is public, SOC 2 is not
6. How complex is your org? Simple SaaS? SOC 2. Complex global ops? ISO 27001 structure helps.

The Pragmatic Approach

For most startups and mid-market companies:

1. Start with SOC 2 Type 2 if you're US-focused (faster, cheaper, unblocks deals)
2. Add ISO 27001 when you have 3-5 EU/UK customers asking for it
3. Bundle both when you're mature and have dedicated compliance resources

Don't overthink it. If US customers are asking for SOC 2, get SOC 2. If EU customers are asking for ISO 27001, get ISO 27001. You can always add the other later with minimal additional effort.

Related articles: What is SOC 2? • SOC 2 Pricing Guide • Compare Auditors