What is SOC 2?
Service Organization Control 2 (SOC 2) is an audit requirement of the American Institute of CPAs (AICPA) relating to data security, availability, and privacy. The purpose of SOC 2 is to ensure that best practices and security policies are being followed to protect consumers' personal information and privacy.
SOC 2 helps build trust between service providers (like cloud storage companies) and their customers (businesses that use those services).
Who Needs to Meet SOC 2?
Any service organization that stores, processes, or transmits customer data—especially in the cloud—needs to meet SOC 2 to demonstrate trustworthiness and compliance with industry-standard security practices.
Key Groups That Need SOC 2 Compliance:
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SaaS Companies
If you're delivering software or services over the internet, especially those involving sensitive data, SOC 2 is often a customer requirement.
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Cloud Service Providers & Managed Services
Businesses offering cloud infrastructure, data hosting, or managed IT services need SOC 2 to prove their controls over availability, confidentiality, and security.
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FinTech, HealthTech, LegalTech, and HR Platforms
Any platform handling regulated or personal data must assure clients that it follows proper data governance standards.
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Startups & Growth-Stage Companies
SOC 2 is frequently a deal-breaker in B2B sales, partnerships, or funding due diligence. If you're scaling fast, SOC 2 can be the key to unlocking enterprise contracts.
Why SOC 2 Matters:
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Builds customer trust
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Reduces sales cycle friction
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Prepares you for future compliance needs (ISO 27001, HIPAA, etc.)
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Proves your internal controls meet rigorous, independent standards
If you handle customer data and sell to other businesses, you likely need to meet SOC 2.
What are The Five Key Principles of SOC 2?
SOC 2 focuses on five key trust service principles:
- Security: Safeguarding customer data from unauthorized access, breaches, and other threats.
- Availability: Ensuring customer data and systems are accessible when needed.
- Processing Integrity: Guaranteeing the accuracy and completeness of data during processing.
- Confidentiality: Keeping customer data confidential and only accessible to authorized individuals.
- Privacy: Respecting customer privacy by following data protection regulations.
What is the Difference between SOC 2 Type I and SOC 2 Type II?
| Aspect |
SOC 2 Type I – Snapshot in Time |
SOC 2 Type II – Operating Effectiveness Over Time |
| What it is |
A point-in-time audit that evaluates whether your controls are correctly designed. |
An audit over some time (3–12 months) that verifies controls are implemented and operating effectively. |
| Purpose |
Demonstrates that the right policies and procedures are in place on a specific date. |
Provides higher assurance by showing controls are consistently followed over time. |
| Best For |
Startups or early-stage companies seeking faster compliance to close deals or meet vendor requirements. |
Mature organizations with enterprise customers, long sales cycles, or recurring compliance obligations. |
| Time to Complete |
Typically 4–6 weeks, depending on audit readiness. |
Several months, depending on the reporting period and readiness. |
What's Involved in Achieving SOC 2 Compliance
1. Readiness Assessment
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Gap analysis against SOC 2 Trust Services Criteria (Security is required; the others are optional).
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Identify and prioritize areas to improve (e.g., access control, vendor management, incident response).
2. Remediation
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Implement missing controls, policies, and documentation.
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Automate evidence collection where possible to reduce overhead.
3. Audit Preparation
4. Formal Audit
5. Report Delivery
Quick Tip:
Many companies start with SOC 2 Type I to win early business and graduate to Type II for long-term credibility and renewals.
See Also:
