If you’re navigating the Cybersecurity Maturity Model Certification (CMMC) requirements, you’re likely wondering: Can I use Microsoft 365 Commercial to achieve CMMC Level 2 compliance? As a CMMC RPO, we get this question often from clients. The short answer is no, but let’s break down why and explore your options for staying compliant while using Microsoft 365.

Note: Much of this information is distilled from Microsoft’s comprehensive February 2025 compliance article, which we highly recommend for a deeper dive.

Why Microsoft 365 Commercial Falls Short for CMMC Level 2

CMMC Level 2 is designed to protect Controlled Unclassified Information (CUI), requiring cloud service providers (CSPs) to meet FedRAMP Moderate or equivalent standards for storing, processing, or transmitting CUI. Unfortunately, Microsoft 365 Commercial no longer meets this threshold. While it previously held a FedRAMP Moderate equivalency, a 2023 U.S. Department of Defense memorandum clarified stricter requirements, and Microsoft 365 Commercial now explicitly lacks FedRAMP support for its productivity services (e.g., Exchange Online, Teams, SharePoint).

Additionally, compliance with DFARS 252.204-7012, which mandates NIST SP 800-171 controls for CUI protection, is not supported in Microsoft 365 Commercial. This makes it unsuitable for organizations handling CUI, as it fails to meet the necessary security and data sovereignty requirements, such as restricting access to screened U.S. persons.

For organizations pursuing CMMC Level 2, Microsoft recommends moving to its government-focused cloud offerings: Microsoft 365 Government (GCC) or Microsoft 365 Government (GCC High). Here’s how they stack up.

Option 1: Microsoft 365 Government (GCC) for CMMC Level 2

Microsoft 365 Government (GCC) is a segregated data enclave within Microsoft’s commercial infrastructure, designed for U.S. government contractors and state/local entities. It operates in Continental United States (CONUS) data centers with enhanced security controls, making it a viable option for CMMC Level 2 compliance.

• FedRAMP Compliance: GCC supports FedRAMP High, exceeding the FedRAMP Moderate requirement for CMMC Level 2. It has Agency Authorizations to Operate (ATOs) from over 30 federal agencies, ensuring robust security.

• DFARS 7012: GCC supports DFARS 252.204-7012 with an auditor’s attestation, covering NIST SP 800-171 controls in a shared responsibility model.

• CUI Support: GCC can handle many CUI categories (e.g., Privacy, Legal), but it’s not suitable for CUI-Specified categories like export-controlled data (e.g., ITAR/EAR) due to global shared services like Entra ID, which may process data outside CONUS.

• Cost and Features: GCC is more affordable than GCC High and offers closer feature parity with Microsoft 365 Commercial, making it an attractive choice for organizations without ITAR requirements.

Caveat: If your CUI includes export-controlled data, GCC won’t suffice due to its lack of native ITAR/EAR support. You’ll need to consider GCC High or implement additional compensating controls, such as FIPS 140-2 validated encryption.

Option 2: Microsoft 365 Government (GCC High) for CMMC Level 2

Microsoft 365 Government (GCC High) is part of Microsoft’s U.S. Sovereign Cloud, purpose-built for the DIB, federal agencies, and organizations handling sensitive CUI, including export-controlled data. It’s Microsoft’s recommended platform for CMMC Level 2 and Level 3 compliance.

• FedRAMP Compliance: GCC High supports FedRAMP High with Agency ATOs from agencies like the Department of Homeland Security and FBI, ensuring compliance with CMMC requirements.

• DFARS 7012: GCC High fully supports DFARS 7012 with a flow-down commitment and NIST SP 800-171 alignment, backed by an attestation of compliance.

• CUI and ITAR Support: GCC High is designed for all CUI categories, including CUI-Specified (e.g., ITAR/EAR), with data residency and processing restricted to CONUS and access limited to screened U.S. persons.

• CMMC Levels 2-3: GCC High is explicitly recommended for CMMC Levels 2 and 3, offering the highest level of cybersecurity maturity for CUI protection.

• Customer Support: Technical support is provided by screened U.S. persons in U.S. locations, with an option to restrict escalations to U.S.-only staff (though this may limit 24/7 availability).

Trade-offs: GCC High comes with a higher price tag and some cross-cloud collaboration restrictions. While Microsoft has improved feature parity, certain capabilities may lag behind Commercial or GCC. However, its robust compliance framework makes it the safest choice for organizations with stringent CUI requirements.

Choosing the Right Cloud for CMMC Level 2

Selecting between GCC and GCC High depends on your organization’s specific needs:

• Choose GCC if you handle CUI-Basic (non-export-controlled) and want a cost-effective, FedRAMP-compliant solution with broader feature availability. Be cautious of potential regulatory changes that could affect compliance, as GCC relies on some global services.

• Choose GCC High if you manage CUI-Specified (e.g., ITAR/EAR) or anticipate future contracts requiring higher compliance watermarks. It’s the most comprehensive option for CMMC Level 2 and beyond, especially for DIB contractors.

Pro Tip: Evaluate your CUI categories using the DoD CUI Program Registry and consult with a CMMC expert to ensure your cloud choice aligns with your contractual obligations. Migrating between cloud environments (e.g., from GCC to GCC High) can be costly and complex, so plan strategically.

Additional Considerations

• Microsoft 365 Commercial for CMMC Level 1: If you’re only pursuing CMMC Level 1 (for Federal Contract Information, or FCI), Microsoft 365 Commercial may suffice, as it supports FAR 52.204-21. However, it’s not designed for U.S. government requirements, and future regulatory changes could pose risks.

• Azure Commercial: Unlike Microsoft 365 Commercial, Azure Commercial supports DFARS 7012 and FedRAMP High, making it a potential pairing with GCC for certain workloads. However, it lacks the data sovereignty commitments of Azure Government.

• Risk Decision: Your organization’s risk appetite and budget will influence your choice. Larger DIB contractors often opt for GCC High for its comprehensive CUI protections, while smaller firms may start with GCC and add compensating controls.

Why Work with Us for CMMC Compliance?

At Stratus Services, we specialize in helping DIB contractors achieve CMMC compliance efficiently and cost-effectively. Whether you’re transitioning to GCC, GCC High, or need a tailored cybersecurity strategy, our experts can guide you through:

• Assessing your CUI requirements and cloud needs.

• Implementing Microsoft 365 Government solutions with minimal disruption.

• Preparing for CMMC assessments with confidence.

Ready to get started? Contact us today for a free consultation or download our CMMC Compliance Checklist to streamline your journey to CMMC Level 2 certification.

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