SOC 29 min read

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

This is the most common question we get: "Should we do SOC 2 or ISO 27001?"

The short answer for most SaaS companies: Start with SOC 2.

Here's why, and when ISO 27001 might be the better choice.

Key Takeaways

Point Summary
For SaaS companies Start with SOC 2 - it's designed specifically for cloud services
~70% overlap Typically for SaaS companies, most controls are shared between frameworks, making the second one easier
Key difference SOC 2 focuses on technical controls; ISO 27001 focuses on organizational processes
Timeline SOC 2: 4.5-6 months; ISO 27001: 3-4 months
Get both If you need both, start with SOC 2 then add ISO 27001 (€15-23K total)

Quick Answer: Start with SOC 2 if you're a SaaS company. SOC 2 focuses on technical controls (many providers bundle penetration testing though it's not required by AICPA). Add ISO 27001 later when specific customers require it (~70% of the work is already done).

The Fundamental Difference

SOC 2 ISO 27001
Designed for SaaS companies, cloud services Any organization
Focus Technical security, data protection in the cloud Organizational processes, documentation
Includes pen test No (commonly bundled by providers, not required by AICPA) No
Output Audit report Certificate
Timeline 4.5-6 months 3-4 months
Annual effort after Year 1 Same process annually Surveillance audits (less intense)
Best for US/North American clients, SaaS B2B EU/APAC clients, public sector, regulated industries

*Timelines vary based on company size, complexity, and initial security readiness.

SOC 2 is specifically designed for SaaS. It covers how you manage data in the cloud - data security, service availability, IP confidentiality.

ISO 27001 is more generic. A law firm can be ISO 27001 certified. A consulting company can be certified. It predates modern cloud computing and focuses heavily on organizational processes.

Why We Recommend SOC 2 for SaaS Companies

For most SaaS companies, SOC 2 provides more security value:

  1. Stronger technical controls: SOC 2 goes deeper on application security, technical implementation, and cloud infrastructure

  2. Penetration testing often bundled: While not required by AICPA, most SOC 2 service providers bundle penetration testing as good practice. Many enterprise clients expect it regardless of the framework. (Note: Penetration testing is not an AICPA Trust Services Criteria requirement for SOC 2.)

  3. SaaS-specific framework: SOC 2 was designed for "how do you secure data and services in the cloud" - exactly what your customers care about

The ISO 27001 Documentation Reality

Here's what founders don't expect about ISO 27001: It's extremely documentation-heavy.

Aspect SOC 2 ISO 27001
Policies written 20-25 documents 30-35 documents
Documentation focus Technical controls Organizational processes
What auditors review Whether controls work Whether processes are documented and followed
Common feedback "We improved security" "We signed a lot of documents"

ISO 27001 is more about process and governance. At the end, you won't necessarily say "this changed how we work" - you'll say "we documented everything and signed a lot of policies."

For engineering teams, this feels less valuable than SOC 2's technical focus.

~70% Overlap Between Frameworks

Good news: Typically for SaaS companies, there's approximately 70% overlap between SOC 2 and ISO 27001 controls.

Shared Controls SOC 2 ISO 27001
Access Control ✓ ✓
Change Management ✓ ✓
Incident Response ✓ ✓
Risk Management ✓ ✓
Vendor Management ✓ ✓
Encryption ✓ ✓
Monitoring ✓ ✓

If you complete SOC 2 first, getting ISO 27001 mainly requires:

The hard technical work is already done.

Real Timeline Comparison

Phase SOC 2 ISO 27001
Implementation 6-8 weeks 4-6 weeks
Audit period 3 months (observation) 1-2 months
Report/Certificate 2-3 weeks 2-3 weeks
Total 4.5-6 months 3-4 months

*Timelines vary based on company size, complexity, and initial security readiness.

ISO 27001 is faster because it doesn't require the 3-month observation period that SOC 2 Type 2 demands.

However, ISO 27001 has a 3-year certification cycle:

  • Year 1: Initial certification
  • Years 2-3: Surveillance audits (shorter, less intense)
  • Year 4: Full recertification

SOC 2 requires annual recertification (same process each year).

Real Cost Comparison

Scenario Typical Investment
SOC 2 only €10,000-50,000 Year 1
ISO 27001 only €10,000-50,000 Year 1
Both frameworks €15,000-60,000 Year 1

The investment for either framework depends on your organization's size, scope, and technical complexity. The key point: pursuing both frameworks doesn't mean doubling your costs, because typically for SaaS companies, approximately 70% of the work is shared.

When to Choose ISO 27001 Instead

Choose ISO 27001 when:

Scenario Why ISO
Public sector clients Government often requires ISO specifically
French/EU enterprise clients ISO has higher "marketing value" in Europe
Highly regulated industries Banks, insurance may specifically require ISO
Competitor parity If all competitors have ISO, you need it too
HDS requirements Health Data Hosting in France builds on ISO
You don't need pen test If clients truly don't care about technical testing

That said, even in Europe, sophisticated buyers increasingly see SOC 2 because they buy American software. They're used to reviewing SOC 2 reports alongside ISO certificates.

When to Get Both

Get both SOC 2 and ISO 27001 when:

  • Customers explicitly require both: Some enterprise clients check off both boxes
  • Security is a competitive feature: In security-conscious industries, having both sends a strong signal
  • You're global: US customers expect SOC 2, European customers may prefer ISO
  • Banking/finance clients: One is good, both is "way fewer questions"

If you're getting both, start with SOC 2 and add ISO 27001 after.

The "ISO 27001 + No Pen Test" Problem

Here's what we frequently see with ISO-only:

Month 1-3:    Complete ISO 27001
Month 4:      Client sends security questionnaire
Question 47: "When was your last penetration test?"
Answer:       "We don't have one"
Client:       "Please provide pen test report within 30 days"

This is why SOC 2 (with proper scope including pen test) often covers more of what clients actually ask for, even if they said "just ISO 27001."

The pen test question appears in 70-80% of security questionnaires, regardless of which certification you have.

Both Recognized in Europe

A common misconception: "SOC 2 is American, so European clients won't accept it."

Reality: European companies buy a lot of American software. Every European enterprise has reviewed SOC 2 reports from US vendors. They know the framework well.

In practice, you can swap SOC 2 and ISO 27001 interchangeably for most European clients. The exception is public sector, which often specifically mandates ISO.

The Decision Framework

Start with SOC 2 if:

  • You're a SaaS company
  • You sell primarily to tech-savvy buyers
  • Your customers will ask for pen test anyway
  • You want stronger technical security validation
  • You're not sure which to choose (default to SOC 2)

Start with ISO 27001 if:

  • A specific customer explicitly requires ISO (and confirmed they won't accept SOC 2)
  • You're targeting public sector
  • You're in a heavily regulated industry where ISO is standard
  • You want the "marketing value" of an ISO certificate in Europe
  • You genuinely don't need pen testing (rare)

Get both if:

  • Different customer segments require different frameworks
  • You're expanding globally (US + EU)
  • Security is a key competitive differentiator
  • You have budget for a comprehensive compliance program

How Adding a Second Framework Works

If you have SOC 2, adding ISO 27001:

If you have ISO 27001, adding SOC 2:

  • Additional investment: Reduced compared to standalone (see SOC 2 costs)
  • Additional work: Penetration testing, 3-month observation
  • Timeline: 4.5-6 months (see how long SOC 2 takes)
  • Key addition: The pen test and observation period

This is why starting with SOC 2 is often more efficient. ISO becomes a straightforward add-on since the technical foundation is already in place.

What Happens If You Drop ISO 27001

ISO certifications are tracked in public registries (IAF - International Accreditation Forum). If you get certified and then drop it:

  • Your dropped certification appears in public registry
  • Clients can see you "lost" your certification
  • You'll need to explain why (never a good conversation)

SOC 2 reports simply expire without public record. There's no registry showing you "used to have SOC 2."

This means: Only start ISO 27001 if you're committed to maintaining it long-term.

Our Recommendation

For most SaaS companies targeting startups/scaleups:

  1. Get SOC 2 first (4.5-6 months)
  2. Add ISO 27001 when needed (+3-4 months)
  3. Maintain both with unified compliance program (shared controls, shared evidence)

Don't pursue ISO 27001 "just because." Get it when specific customers require it.

And definitely don't do ISO 27001 without a pen test and expect enterprise security questionnaires to go smoothly. They won't.

Not sure which framework fits your customer base? Talk to our team - we'll help you figure out what your specific customers actually need.

Sources

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