SOC 2 is an independent audit that examines how a service company protects customer data, based on five trust criteria: security, availability, processing integrity, confidentiality, and privacy. A SOC 2 report is produced by a licensed auditor, not a self-certification, and it tells customers that a company’s controls were tested against a recognized standard. For software, being SOC 2 ready means the system and processes are built to meet those criteria so the company can pass the audit.
- 31%Vulnerability exploitation overtook stolen credentials as the top way attackers get in for the first time, driving 31% of confirmed breaches, per Verizon's 2026 Data Breach Investigations Report, which analyzed more than 22,000 confirmed breaches across 145 countries.
- $10.22MThe average cost of a data breach in the United States hit a record $10.22 million in 2025, even as the global average fell to $4.44 million, according to IBM's Cost of a Data Breach Report.
- 139.7MMore than 139.7 million individuals had protected health information exposed across 772 large breaches reported in 2025, the a record number of large breaches, per the HHS Office for Civil Rights HIPAA breach portal.
- 500+The FedRAMP Marketplace lists 500+ cloud services with a full FedRAMP Authorization, giving federal agencies a vetted baseline of NIST based security controls to rely on, per the FedRAMP Marketplace.
The five trust services criteria
SOC 2 is built around five criteria. Security is required; the others are included based on what is relevant.
- Security: protection against unauthorized access (the foundation, always included).
- Availability: the system is up and accessible as committed.
- Processing integrity: the system processes data completely and accurately.
- Confidentiality: confidential information is protected.
- Privacy: personal information is handled per the company’s privacy commitments.
Type I vs Type II
- SOC 2 Type I checks that the right controls are designed and in place at a point in time.
- SOC 2 Type II checks that those controls actually operated effectively over a period (often several months). Type II is the stronger, more commonly requested report.
Why SOC 2 matters
When you sell software or services to other businesses, especially in finance, healthcare, or enterprise, your customers’ security teams will ask how you protect their data. A SOC 2 report answers that question with independent evidence, which can be the difference between winning and losing a deal. It has become a standard expectation for B2B software and service providers.
What SOC 2-ready software looks like
A SOC 2 audit covers both the company’s processes and its software. On the software side, readiness means: access controls and least privilege, encryption, audit logging, secure development practices, monitoring, and the documentation to prove it. Building these in from the start is far cheaper than retrofitting them before an audit. (See What Is Custom Software Development.)
Note: a SOC 2 report belongs to the company that is audited. A development partner builds and configures software to support SOC 2; the company pursues and holds the report.
SOC 2 compliance FAQs
What is SOC 2 in simple terms?
An independent audit of how a company protects customer data, measured against five trust criteria, resulting in a report customers can trust.
What are the five SOC 2 criteria?
Security, availability, processing integrity, confidentiality, and privacy. Security is always included; the rest are based on relevance.
What is the difference between SOC 2 Type I and Type II?
Type I checks controls are designed and in place at a point in time; Type II checks they operated effectively over a period. Type II is stronger.
Can you build SOC 2-ready software?
Yes. We build software with the access controls, encryption, logging, and documentation a SOC 2 audit looks for. The company pursues and holds the report; we engineer the software to support it.
Closing CTA
Building software that will face a SOC 2 review? Request a free consultation and we will build it to support the audit.
Related guides
- What Is FedRAMP?
- What Is Custom Software Development?
- How Much Does Custom Software Development Cost in 2026?
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