The modern market is characterized by increasing cyber threats and a heightened awareness of data privacy. Software companies, in particular, are custodians of vast amounts of sensitive data, from customer personally identifiable information (PII) to proprietary intellectual property. In this context, achieving security compliance is compulsory for software companies looking to build trust and scale. 

Although ISO 27001 and SOC 2 are widely recognized benchmarks for security maturity, they are not interchangeable. The most notable difference is that ISO 27001 is a certification, while SOC 2 is a regulatory framework for good security practices. Each has their distinct focus, benefits, and relevance depending on your company’s customer base, industry, and growth goals. 

Let’s break down the core differences between ISO 27001 and SOC 2 to help you make an informed decision on what to pursue!

The decision between ISO 27001 and SOC 2 is not always an either/or proposition, and often, companies pursue both over time. However, initial strategic choices depend on your business model, target markets, and customer expectations.

Choose ISO 27001 if:

• You operate in multiple countries or plan to go global. 
• You want a comprehensive, risk-based ISMS covering all aspects of information security. ISO 27001 guides you in building a complete system for managing information risk, not just specific security controls.
• Your clients demand internationally recognized certification standards. Many European and Asian clients, in particular, will specifically request ISO 27001.
• You need to mature your overall information security posture. The process of implementing ISO 27001 forces a deep dive into organizational security, leading to fundamental improvements.
• You aim for continuous improvement in your security posture. 

Choose SOC 2 if:

• You are a SaaS provider or cloud service provider primarily serving U.S. clients. 
• You want to demonstrate operational maturity and effectiveness in handling customer data. In particular, SOC 2 Type II provides assurance that your controls are also operating effectively over time.
• Your potential clients are asking for a SOC 2 report. 
• You prefer a more flexible, cost-effective compliance program with a potentially faster turnaround (for Type I). 
• You need to build trust with stakeholders regarding data security and privacy. 

Many progressive companies recognize the complementary strengths of both. They might initially pursue SOC 2 to address immediate client demands, especially in the U.S. market, while simultaneously working towards ISO 27001 to build a more robust, globally recognized information security management system.