FedRAMP vs SOC 2: Which Do You Need?
FedRAMP and SOC 2 are both critical security certifications, but they serve very different purposes. FedRAMP is required for selling cloud services to US federal government agencies, while SOC 2 demonstrates security controls to commercial enterprise customers. Understanding when you need each—or both—is essential for your go-to-market strategy.
Quick Comparison
| Factor | FedRAMP | SOC 2 |
|---|---|---|
| Purpose | Federal cloud security authorization | Commercial security assurance |
| Governing Body | GSA, OMB, DHS (US Government) | AICPA (Private sector) |
| Required For | Selling to US federal agencies | Enterprise sales (voluntary) |
| Control Framework | NIST SP 800-53 (300-400+ controls) | Trust Service Criteria (64 controls) |
| Impact Levels | Low, Moderate, High | Type I, Type II |
| Timeline | 12-24+ months | 6-12 months |
| Cost Range | $500K - $3M+ | $25K - $100K |
| Renewal | Continuous monitoring + annual assessment | Annual audit |
| Authorization | ATO from agency or JAB P-ATO | CPA audit report |
Understanding the Key Differences
FedRAMP: Federal Cloud Authorization
FedRAMP (Federal Risk and Authorization Management Program) is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. It's mandatory for any cloud service provider (CSP) wanting to work with federal agencies.
FedRAMP Impact Levels:
- Low Impact: ~125 controls. For systems where loss would have limited adverse effect. Examples: Public websites, collaboration tools.
- Moderate Impact: ~325 controls. Most common level. For systems where loss would have serious adverse effect. Examples: Email, HR systems, most SaaS.
- High Impact: ~421 controls. For systems where loss would have severe/catastrophic effect. Examples: Law enforcement, emergency services, financial systems.
SOC 2: Commercial Security Assurance
SOC 2 is a voluntary audit framework developed by the AICPA that demonstrates your organization's security controls to commercial customers. It's the de facto standard for SaaS and cloud service providers selling to enterprise customers.
SOC 2 Trust Service Criteria:
- • Security (Required): Protection against unauthorized access
- • Availability: System uptime and accessibility
- • Confidentiality: Protection of confidential information
- • Processing Integrity: Accurate and timely processing
- • Privacy: Personal information handling
You Need FedRAMP If:
- ✓ You want to sell cloud services to US federal agencies
- ✓ Federal contracts are a key part of your business strategy
- ✓ You're targeting DoD, DHS, or other federal departments
- ✓ Government agencies are asking about your FedRAMP status
- ✓ You want to access the $100B+ federal cloud market
- ✓ State/local governments require FedRAMP (increasingly common)
You Need SOC 2 If:
- ✓ You sell to enterprise commercial customers
- ✓ Customers include SOC 2 in procurement requirements
- ✓ You're a SaaS or cloud service provider
- ✓ You handle customer data and need to prove security
- ✓ You want faster, more affordable compliance
- ✓ Commercial market is your primary focus
You Need BOTH If:
- ✓ You serve both federal and commercial markets
- ✓ You want to maximize your addressable market
- ✓ Federal agencies AND enterprises are in your pipeline
- ✓ You're building a comprehensive security program
- ✓ You want SOC 2 as a stepping stone to FedRAMP
Control Overlap: 70-80%
FedRAMP's NIST SP 800-53 controls significantly overlap with SOC 2's Trust Service Criteria. Organizations with SOC 2 have a strong foundation for FedRAMP—but FedRAMP requires many additional controls.
Overlapping Controls
- • Access control and identity management
- • Encryption (data at rest and in transit)
- • Audit logging and monitoring
- • Incident response procedures
- • Change management
- • Vulnerability management
- • Security awareness training
- • Vendor risk management
FedRAMP Additional Requirements
- • FIPS 140-2 validated encryption
- • US-based data residency
- • Personnel security (background checks)
- • Continuous monitoring (ConMon)
- • Plan of Action & Milestones (POA&M)
- • System Security Plan (SSP)
- • Incident reporting to US-CERT
- • Supply chain risk management
Timeline Comparison
FedRAMP Timeline
- Readiness Assessment: 2-4 months
- Documentation: 4-8 months
- 3PAO Assessment: 3-6 months
- Agency Review: 3-12 months
- Total: 12-24+ months
SOC 2 Timeline
- Gap Assessment: 2-4 weeks
- Remediation: 2-4 months
- Type I Audit: 2-4 weeks
- Type II Observation: 3-12 months
- Total: 6-12 months
Cost Comparison
FedRAMP Costs
- Initial authorization: $500K - $3M+
- 3PAO assessment: $150K - $500K
- Annual maintenance: $200K - $500K
- Internal resources: 2-5 FTEs
Costs vary significantly by impact level
SOC 2 Costs
- Implementation: $15K - $50K
- Audit fees: $10K - $50K
- Annual renewal: $15K - $40K
- Internal resources: 0.5-1 FTE
Much more accessible for startups and SMBs
FedRAMP Authorization Paths
Agency ATO Path
Work directly with a federal agency sponsor who will grant an Authority to Operate (ATO). Other agencies can then reuse your authorization.
- • Requires agency sponsor/customer
- • Faster if you have agency relationship
- • Agency-specific requirements may apply
- • Most common path for first-time FedRAMP
JAB P-ATO Path
Get a Provisional ATO from the Joint Authorization Board (DoD, DHS, GSA). Considered the "gold standard" for FedRAMP.
- • More rigorous review process
- • Higher credibility with agencies
- • Longer timeline (prioritization queue)
- • Best for high-demand services
SOC 2 as a Stepping Stone to FedRAMP
Many organizations start with SOC 2 and later pursue FedRAMP. This approach offers several advantages:
Common Questions
Does SOC 2 satisfy FedRAMP requirements?
No. SOC 2 doesn't meet FedRAMP requirements, but it provides a strong foundation. You'll still need to implement additional controls, documentation, and go through the FedRAMP authorization process.
Can I sell to federal agencies with just SOC 2?
Generally no. Cloud services used by federal agencies must be FedRAMP authorized. However, some agencies may accept SOC 2 for on-premises solutions or as part of a risk-based decision for specific use cases.
Which should I do first?
Start with SOC 2 unless you have immediate federal opportunities. SOC 2 is faster, cheaper, and opens commercial markets while building the foundation for future FedRAMP authorization.
Is FedRAMP worth the investment?
If federal government is a key market, yes. FedRAMP opens access to a $100B+ market with long contract cycles and sticky customers. The ROI depends on your federal sales pipeline and strategy.
Strategic Recommendations
Start with SOC 2 If:
- • Commercial market is your primary focus
- • Budget is limited (<$100K)
- • You need compliance quickly
- • No immediate federal opportunities
- • Building security program foundation
Prioritize FedRAMP If:
- • Federal contracts in active pipeline
- • Agency sponsor committed
- • Significant budget available ($500K+)
- • Long-term federal strategy
- • Competitive differentiation needed
Build your path from SOC 2 to FedRAMP
LowerPlane helps you achieve SOC 2 certification and build the foundation for FedRAMP authorization, with 70-80% control reuse between frameworks.