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SOC 2 Overview

1. What is SOC 2?

SOC 2 (System and Organization Controls 2) is a security and trust compliance framework developed by the American Institute of Certified Public Accountants (AICPA).
It focuses on the controls and processes a company uses to protect data, specifically customer data, in line with the

Trust Services Criteria (TSC):

  1. Security – Protection against unauthorized access. (Mandatory in all SOC 2 audits)
  2. Availability – System uptime and performance commitments.
  3. Confidentiality – Protecting sensitive business information.
  4. Processing Integrity – Ensuring system processing is complete, accurate, and authorized.
  5. Privacy – Handling and protection of personal information in accordance with commitments.

Types of SOC 2 Reports:

  • Type I – Verifies your controls exist and are designed correctly at a specific point in time.
  • Type II – Verifies your controls exist and operate effectively over a period (usually 3–12 months).


2. Why a Utility SaaS (or any SaaS) Must Have SOC 2

For a SaaS company, SOC 2 is not just a compliance checkbox — it’s a business growth enabler.

For a Utility SaaS like us (handling PII like SSNs, DOB, addresses, meter data):

  • High PII Risk – Utilities store sensitive information that can be exploited if breached.
  • Enterprise Procurement Requirements – Most B2B RFPs (especially in the US) require SOC 2 as a minimum security standard.
  • Public Sector Trust – Municipal utility companies expect alignment with strong security frameworks (SOC 2 + NIST).
  • Vendor Management – Your customers must prove their vendors are secure; SOC 2 makes you a "low-risk" vendor.
  • Competitive Edge – Many competitors lack this certification; having it shortens sales cycles.

In short: For utilities and high-trust industries, SOC 2 is becoming a gatekeeper requirement rather than a “nice-to-have.”



3. What All Comes Under SOC 2

SOC 2 covers policies, processes, and technical controls across the organization — not just IT infrastructure.

This has work to be done on both Tech and Non-Tech side (On the Tech side this resides mostly on INFRA and on the non tech its OPS related work)

Key Areas SOC 2 Will Audit in a SaaS Company:

A. Governance & Policies

  • Security policy (Best Practices)
  • Data classification (Prod and Non Prod- customer data)
  • Vendor management policy (Signed Docs like Signed DPAs)
  • Incident response policy (Pagerduty and post-incident reviews)
  • Change management policy (Github and Code Review Practices)
  • Access control policy (All internal tooling)
  • Disaster recovery/business continuity plan (Infra DR Plans)

B. Access Control

  • Role-based access (All internal tooling)
  • Multi-factor authentication (MFA)
  • Termination process for removing access
  • Least privilege principle

C. Infrastructure Security

  • Secure cloud configuration (AWS, GCP)
  • Network security (VPC, firewall rules, zero trust principles)
  • Encryption in transit (TLS 1.2+)
  • Encryption at rest (KMS)

D. Application Security

  • Secure development lifecycle (SDLC)
  • Code review processes
  • Vulnerability scanning and patching (Static code analysis (eg sonarqube), docker trivy scans or container regist. vul scans)
  • Secure staging environment

E. Monitoring & Incident Management

  • Centralized logging (e.g., AWS CloudTrail, Signoz)
  • Intrusion detection/alerting
  • Incident documentation and post-mortems
  • Regular risk assessments

F. Availability & Resilience

  • Uptime monitoring
  • Failover and redundancy
  • Backup frequency and testing
  • Recovery time objectives (RTO) and recovery point objectives (RPO)

G. Confidentiality & Privacy

  • Data minimization
  • Secure disposal
  • Masking/redacting PII in logs, traces, or posthog session replays
  • Customer data handling rules (rulebook and team onboardings on this)


4. How a SaaS Company Benefits from SOC 2

Business Benefits

  1. Faster Sales Cycles
    • Cuts weeks/months off security questionnaires.
    • Opens doors to enterprise and public sector deals.
  2. Competitive Differentiator
    • Many startups delay SOC 2; having it early is a strong trust signal.
  3. Global Expansion
    • Aligns well with ISO 27001 and NIST, easing entry into other regulated markets.

Security & Operational Benefits

  1. Stronger Security Posture
    • Forces you to formalize policies and security controls.
  2. Risk Reduction
    • Identifies and addresses vulnerabilities before they cause incidents.
  3. Vendor Trust
    • Your customers can confidently rely on your handling of their data.
  4. Regulatory Alignment
    • Helps with other frameworks (CCPA, GDPR, NIST) since controls overlap. (frameworks)



NOTE:

  • SOC 2 is an attestation, not a certification: There is no official certifying body or pass/fail status for SOC 2
  • Attestation vs. certification matters: Semantics matter because communicating SOC 2 as a certification may cause misrepresentation or confusion with customers, vendors, and stakeholders
  • What attestation means: An attestation is a formal audit-based statement about the presence and effectiveness of your security controls
  • SOC 2 report is a third-party opinion: A licensed CPA conducts an audit and provides an objective report on your security posture
  • SOC 2 Type I attestation: Offers a snapshot of your controls at a specific point in time, confirming their presence—not performance
  • SOC 2 Type II attestation: Covers a 6–12 month period and evaluates the ongoing effectiveness of your controls
  • No legal mandate: SOC 2 is voluntary, with most companies choosing to pursue it to build trust, not to meet regulatory requirements


Sources:

https://www.hypercomply.com/blog/what-is-soc-2-compliance
https://www.qovery.com/blog/soc-2-compliance-checklist/

https://www.vanta.com/collection/soc-2/is-soc-2-a-certification-or-attestation 

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