Today, compliance standards like SOC 2 are ubiquitous to security strategy planning and the sales process. Originally, these standards emerged as a safety-measure, a response to high-profile data breaches due to insecure third-party vendors. SOC 2 approached security from a comprehensive angle, targeting internal company policies, device security, and application security.
At the same time, while SOC 2 is designed to be an un-opinionated, holistic framework, it’s often treated as an elaborate set of checkboxes. This is partially due to the broad, often confusing nature of SOC 2, which compels the need for a step-by-step rubric. It’s also due to end-to-end SOC 2 solutions that provide an opinionated path to compliance.
Given that SOC 2 is a necessary badge to work with enterprises or even mid-market companies, we want to better understand the cost of SOC 2. At the same time, we need to contextualize this cost. For organizations that treat SOC 2 as a checkbox-style task, the cost is functionally a list of line-items where the primary benefit is access to bigger sales conversations. Meanwhile, for organizations that use SOC 2 as an opportunity to improve their security posture, the cost is also weighed against the benefits of minimized risk. Keeping this dichotomy in mind, let’s dive into SOC 2’s costs.
SOC 2 (System and Organization Controls 2) is a framework that helps service organizations demonstrate their controls for security, availability, processing integrity, confidentiality, and privacy of customer data. Developed by the American Institute of CPAs (AICPA), SOC 2 has become the proverbial gold standard for data security compliance, especially for SaaS companies and cloud service providers.
Unlike other compliance frameworks that mandate specific security measures, SOC 2 is principle-based. It gives organizations flexibility in how they implement controls to meet the Trust Services Criteria:
These criterions vary from organization to organization, but all SOC 2 reports must include the Security criterion at minimum, while the other four criteria are optionally based on business needs and customer requirements.
Notably, SOC 2 does not have explicit requirements. For instance, SOC 2 doesn’t mandate that businesses use a certain security tool or encryption technique; instead, SOC 2 requires organizations to commit to a comprehensive plan that’ll be audited by a third-party. It’s up to the auditor to determine if that plan achieves satisfactory security. That said, this manifests itself as a list of checkboxes since many auditors look for the same things (e.g. password managers, distinct identities, encrypted hard drives, etc).
In the past, SOC 2 was an optional standard only needed by businesses with discerning enterprise clients. Today, however, SOC 2 is no longer optional, gating access to work with enterprises and mid-market companies. This is partially due to SOC 2 being naturally viral; SOC 2’s Security criterion includes the organization’s own vendor security, and while SOC 2 permits lengthy security questionnaires are a suitable substitute, it practically encourages organizations to only work with other SOC 2 organizations.
There are two types of SOC 2 reports:
For younger organizations selling to mid-market buyers, a SOC 2 Type I report might be sufficient. But for most organizations, a SOC 2 Type II report is necessary, as it demonstrates sustained compliance over time rather than just a snapshot.
Businesses will often elect for Type I before attaining Type II. There are a few reasons for this. First, Type I is considerably cheaper than Type II. It is also the only requirement amongst mid-market companies’ procurement policies; given that businesses typically start with mid-market before selling to enterprises, they’ll encounter a Type I requirement earlier than Type II. Additionally, given that all requirements of Type I are applicable to Type II, it’s an effective stepping stone.
In theory, SOC 2 compliance only requires an organization to met the security tenets and other criterion, and then hire a SOC 2 auditing firm to provide them with the certification (which includes a SOC 2 report).
However, SOC 2 considers multiple categories—spanning mobile device management, firewalls, password policies, disaster recovery, and more. Most companies don’t readily have a SOC 2 expert in-house; as a result, they’ll opt to use an external solution to maximize the likelihood of passing an audit. Today, there are two primary options: SOC 2 readiness software or an external consultancy.
External consultancies are particularly popular for organizations doing a holistic compliance motion (e.g. attaining SOC 2, ISO 27001, GDPR etc) or genuinely interested in improving their security posture. A consultancy would advise the client on the steps that they’d specifically need to take to reach SOC 2 readiness while also thinking about security policies outside of SOC 2’s base-level requirements.
However, many companies opt for SOC 2 compliance platform such as Drata, Vanta, or Secureframe. While these platforms are costly, with minimum contracts starting close to $10,000, they help provide an organized pane of glass to track compliance progress. They are strictly optional; the SOC 2 auditor will not look for a SOC 2 management platform. However, they do streamline the process by providing pre-built internal policies, monitoring devices for correct settings, and scanning infrastructure configurations—and some auditors will use the management platform to accelerate the audit.
Whichever the path—consultants or software—companies need to readily produce or integrate their backends, logs, devices, and other surfaces with prove adherence to standards. This might include purchasing additional tooling, such as password managers, mobile device management (MDM) tools, and anti-virus software. Additionally, beyond product or service purchases, engineering and management hours might be necessary. If any compliance gaps are identified, they must be addressed before submitting for an audit.
Finally, organizations should meet with a compliance audit firm well before submitting for an audit; an early meeting can help sync on what the audit firm is looking for, especially security policies that might be considered optional at other audit firms. Security is an inherently opinionated thing (for example, some organizations prefer decentralized versus centralized security principles), so aligning with an audit firm early will clear any ambiguities.
Companies often purchase products to achieve the security principles that they’re willing to commit towards.
However, these costs shouldn’t strictly be attributed to SOC 2; more importantly, they better the business’s security posture, helping the minimize the possibility of a disastrous and expensive cyberattack.
The total cost of SOC 2 compliance varies significantly based on your company's profile, approach, scope, and preparedness. There are a few notable dimensions that affect cost.
Impact on Total Cost: Large
SOC 2 Type II involves significantly more thoroughness and work compared to SOC 2 Type I. Choosing SOC 2 Type II over SOC 2 Type I could potentially double or triple the cost; however, SOC 2 Type II is typically necessary for working with enterprises, especially for larger deals.
Impact on Total Cost: Large
SOC 2 involves a lot of per-seat costs. Compliance readiness software like Drata is priced per seat (or approximated via tiers). Additionally, password managers, MDM solutions, and other security products are typically priced per seat.
Impact on Total Cost: Moderate
For companies that valued security from Day 0, many of SOC 2’s provisions might already be in-place. For others, significant engineering costs might be necessary.
Impact on Total Cost: Moderate
Some products have more complex infrastructure (like a backend composed of multiple microservices servers). This creates more vulnerability points, requiring more work to lock things down.
Impact on Total Cost: Moderate
Whether using a SOC 2 platform like Drata or Vanta or a SOC 2 consultancy, there is a cost to each which typically scales based on the company size. Most organizations will use an external service given the typical confusion associated with SOC 2, but should choose an external service that maps to their compliance goals. For organizations that want to primarily pass SOC 2, Drata or Vanta might be preferred. For organizations looking to dramatically improve their compliance and security postures, then a consultancy might provide a more open-ended approach.
Impact on Total Cost: Low
Different SOC 2 auditors have varying levels of strictness. Some auditors are relatively lenient and are preferred by organizations that are looking mostly for the SOC 2 badge; others are designed for organizations that actually want to improve their security posture.
Impact on Total Cost: Moderate to Low
SOC 2 requires purchasing software to meet certain tenets. For instance, a subscription to Dashlane or 1Password might be purchased for password security. A subscription to Jamf, Intune, or Kandji is necessary for mobile device management (or to a security consolidation platform like Zip). These software options vary in price—however, by bundling them together, businesses could reduce their overall software expenditure.
Given the many dimensions that impact SOC 2 costs, it’s impossible to easily estimate the average cost for a generic organization. However, we can group costs into a few categories to make it possible to estimate.
Let’s start with a line-item estimate of the per-seat costs of SOC 2-related costs, while remembering that per-seat costs trend downwards in bulk.
Following these numbers, a 50 person company would have a fee of around $1,700 - $4,100 per month for security tooling
These costs are just the per seat costs of these software solutions; many might also come with a platform fee, with a minimum floor price of high four or five figures. However, many organizations already utilize these products and might not directly attribute them to SOC 2 costs. Notably, none of these products are strictly purchased for SOC 2; instead, they’re just an advisable tenet of achieving good security posture.
While strictly optional, most businesses opt for a platform like Vanta or Drata (or hire consultants). Vanta and Drata have a price floor close to $10,000 for small startups, but can scale to low six-figure contracts for larger companies.
SOC 2 can take significant engineering and management hours. For engineers, SOC 2 might require changes to the security stack that would otherwise fail a penetration test.
Beyond the preparedness, there is also an additional cost from the SOC 2 audit firm itself, where different SOC 2 audit firms charge different amounts. Specifically, a SOC 2 audit firm is being paid to produce a SOC 2 report for the organization that details its security posture and internal processes.
A Type I audit, with its shorter timeline and narrower scope, usually costs between $10,000 and $25,000. This includes the costs for drafting internal policies, vetting infrastructure configurations, and hiring a penetration-testing firm to perform a test.
In contrast, a Type II audit has audit fees ranging from $30,000 to $60,000, but that does not even factor in the additional costs. Type II audits require substantially more evidence collection and auditor involvement which can balloon costs. Accordingly, startups often begin with Type I to jump-start sales discussions, while Type II has become the expected standard for enterprise customers. The nature of company matters too; a developer tool with repository access might require SOC 2 Type II much earlier than an external design or sales tool.
Generally speaking, given the rigor of a Type II audit, there is a multiplier effect on the aforementioned costs (Vanta subscription, security tooling costs etc).
It is difficult to estimate a true average price of SOC 2 given the multiple moving pieces. However, we could estimate the cost of SOC 2 through explicit case studies. One of these that’s publicly available is StrongDM’s publicly documented SOC 2 audit.
StrongDM invested $147,000 all-in on their SOC 2 Type I audit. However, there is a sprawling range of sub-costs that amounted to this number. For instance, they spent only between $12K and $17K for the SOC 2 auditor fees itself.
However, they spent significantly more capital indirectly on lost productivity. For the person that was focused on SOC 2, they estimated a loss of $50-75K. Additionally, they spent $10K for legal and around $5K for training staff on SOC 2 policies. Finally, they spent around $30K on security tooling to meet SOC 2 prerogatives.
If SOC 2 is treated as a checkbox requirement, then it’s only a negative. However, if it’s used as an opportunity to improve an organization’s security posture, it’ll materialize into long-term benefits (beyond accelerating your sales cycle with enterprise customers).
There are two categories of benefits: (i) streamlined business processes leading to less issues and (ii) reduced likelihood of a catastrophic cyberattack that could lead to massive churn, lost trust, and legal fees.
Zip Security was designed around this philosophy: approach security holistically and they’ll be savings from avoiding future security issues. In that sense, SOC 2 compliance is more of a positive side-effect of good security than a driving force. Notably, Zip Security goes beyond the basic requirements of SOC 2 Type I or SOC 2 Type II without incurring additional headache for the user.
This includes:
The result? You achieve enterprise-grade security compliance without the enterprise-grade complexity or cost structure. Your team can focus on building your product and serving customers while Zip Security handles the intricate details of maintaining continuous compliance and a fantastic security posture.
