Compliance Standard
SOC 2 (System and Organization Controls 2) is an American audit framework developed by the AICPA that evaluates how a service organisation handles customer data based on five Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. SOC 2 reports are issued by certified public accountants (CPAs) after auditing.
SOC 2 comes in two types: Type 1 is a point-in-time attestation (controls exist and are designed appropriately as of a specific date), Type 2 is a duration audit (controls operated effectively over a 6-12 month period). For US enterprise customers, SOC 2 Type 2 is the customary minimum bar — Type 1 is rarely accepted alone. Indian SaaS companies selling to US enterprises need SOC 2 Type 2 to clear vendor due diligence. Typical timeline: 4-9 months for Type 1, additional 6-12 months audit period for Type 2.
Industries served: SaaS selling to US enterprises, Indian SaaS unicorns, Cloud service providers, Fintech, Healthcare Tech, EdTech serving US schools
Related terms: ISO 27001, DPDP Act 2023, HIPAA, GDPR, Trust Services Criteria
Because US enterprise customers require it. Roughly 80-90% of US Fortune 1000 companies mandate SOC 2 Type 2 from SaaS vendors during procurement. Without SOC 2, Indian SaaS cannot sell to US enterprise. For Indian SaaS focused on Indian + non-US markets, ISO 27001 is the more relevant certification.
SOC 2 Type 1: 4-9 months end-to-end. SOC 2 Type 2: Additional 6-12 month audit observation period after Type 1, then Type 2 report issued. Total Type 2 timeline from start: 10-21 months. Many Indian SaaS startups pursue Type 1 first to unlock customer pilots, then Type 2 for full enterprise readiness.
Total ₹15-50 lakh for Type 1 + Type 2 over 18-24 months. Breakdown: SOC 2 consultancy (₹5-15 lakh), audit firm fees (₹8-20 lakh for Indian or US firm), tooling for evidence collection ($30-100k/year — Vanta, Drata, Secureframe are common), internal effort (200-500 hours by security/compliance lead).
Depends on your target market. US enterprise customers: SOC 2 Type 2 first. India + EU + global: ISO 27001 first (more universally recognised). Many Indian SaaS startups serving global markets pursue both — ISO 27001 in year 1, SOC 2 in year 2. There is significant overlap (~60-70% of controls), so the second certification is incremental, not redundant.
Modern SOC 2 audit relies on automated evidence collection: Vanta, Drata, Secureframe, Tugboat Logic (now OneTrust), Sprinto (Indian-origin). These tools connect to your AWS/Azure/GCP, GitHub, HRMS, identity provider — and continuously collect evidence (access reviews, vulnerability scans, change logs) for auditors. Tooling cost typically ₹2-8 lakh/year, dramatically reduces auditor effort and faster certification.
Free SOC 2 readiness consultation for Indian SaaS — Type 1 + Type 2 roadmap.