GCC vs. GCC High: CMMC Ain’t Just Some Box to Check

By Maggie McGrath, Chief Operating Officer

I spend a lot of time thinking about Microsoft licensing and Microsoft cloud instances.  Like… a lot.  One of the questions I most frequently get from (sticker-shocked) federal contractors is “do I really have to move to GCC High?  Can’t I get away with GCC?”  And the answer I give is a firm and authoritative “maybe!”. 😄

In this article I’m going to attempt to clear some of the mud from around this question, and (fingers crossed) will do it without making any brains explode.

Cutting Through the Alphabet Soup

If you work in the Defense Industrial Base (DIB), you know that the Cybersecurity Maturity Model Certification (CMMC) is on its way into contracts, courtesy of Defense Federal Acquisition Regulation Supplement (DFARS) 7021, which is currently sitting at the Office of Information and Regulatory Affairs (OIRA) just waiting to hit final publication in the Code of Federal Regulations (CFR), which is definitely not happening on October 1st but also almost definitely happening this fall sometime.

We’re gonna have to write a whole other blog on just acronyms. (Or we could just look at the glossary in CFR 32 part 170.)

Ok. We’ve got DIB/CMMC acronyms. Then Microsoft comes into play and it’s just… more. Of everything. Let’s get into Microsoft cloud instances first.

GCC is Government Community Cloud . GCC High is Government Community Cloud High . They’re the cloud instances Microsoft built to create separation for organizations with contracts tied to the Department of Defense. Microsoft is obvs a global company running global infrastructure. But when we’re handling sensitive information for the U.S. government, we want to be a little less global in where that information resides. Enter: Microsoft GCC and GCC High.

Honestly, let’s just stop here. If we start going into individual licenses, or even license bundles, brains WILL explode. Mine, mostly. You wanna talk deep licensing? Book time with me and let’s do it. Otherwise, let’s just get into cloud instances and CUI.

Why GCC vs. GCC High Even Matters

The real question isn’t “which license is cheaper?” or “which Teams background options do I get?” It’s: which environment actually meets CMMC Level 2 requirements?

Here’s the short version:

• Microsoft GCC (Government Community Cloud) is designed for state and local governments, and some federally affiliated organizations. Data is stored in U.S. datacenters, but support personnel may be non-U.S. citizens. PLUS, the underlying Azure services are often global. So, when you go to authenticate with Entra ID, that authentication might be happening in the US. It also might be happening in (insert country name here). We do not love this, and CMMC really does not love this.

• Microsoft 365 GCC High plans were built specifically for defense contractors and the DoD. Data and underlying Azure services are not only stored in the continental U.S., but support is restricted to U.S. citizens on U.S. soil. As our pal Richard Wakeman over at Microsoft says, “[GCC High and Azure Government include] a US Sovereign Cloud accreditation boundary encompassing all services attached to Azure Government, Microsoft 365 Government (GCC High) and Dynamics 365 Government (GCC High)”. GCC High was MADE for export controls in the US.

That’s a huge distinction if you’re dealing with CUI.

Why GCC is “close but not close enough”

Here’s where GCC falls short when it comes to CMMC at Level 2:

• Compliance frameworks: GCC works for CMMC at Level 1. But as soon as you get to CUI Specified (e.g., ITAR, EAR, NOFORN) you’re putting your eggs in the wrong basket.

• Access control: GCC doesn’t guarantee that only screened U.S. citizens can touch your data at the support level. GCC High does.

• Audit reality check: Auditors aren’t swayed by “well, GCC is kind of similar to GCC High.” They’re going to look for strict alignment with CMMC Level 2 requirements and NIST 800-171 controls. GCC simply doesn’t line up fully.

But what about FedRAMP, you say? And yeah, GCC has FedRAMP authorization (honestly, this is v cool and I applaud Microsoft for going through this process). BUT, the long and short of it is, if you are dealing with CUI Specified (and we think you are), you need GCC High and full data sovereignty.

The Money Question: GCC vs. GCC High Costs

I get it and agree: Microsoft licensing for defense contractors is not cheap. GCC High is significantly more expensive than GCC, and migrations are trickier. You can’t just flip a switch; Microsoft has to validate that you even qualify to be in GCC High.

But here’s the math:

• Go with GCC and risk failing a CMMC assessment → potential contract loss, emergency remediation projects, reputational damage, holy smokes…and don’t forget about the False Claims Act..
• Go with GCC High → higher up-front cost, but compliance-aligned and audit-ready.

Think of GCC as a sturdy door lock. GCC High is that same lock, plus a fence, plus motion sensors, plus a guard dog. Which one would you trust with DoD data?

This isn’t just about what you pay for licenses. It’s about whether you get to keep your DoD contracts and stay in business.

What Happens If You Stay in GCC?

Here’s a real-world scenario I’ve seen:

You’re a subcontractor. Your prime contractor is already in GCC High (because they had to be). They send CUI down to you, but you’re in GCC. Congratulations, you’ve just introduced a compliance gap into their environment. That prime will either force you to move to GCC High or cut you out of the contract.

For my Prime contracting pals, you know how easy it is to receive CUI from the government – they want you to do the work so they’re going to send you what you need to get it done. When they send it, are they sending it to a compliant environment? Or are you introducing risk to the government?

The Bottom Line: Don’t Gamble on “Close Enough”

Let’s put this plainly: Microsoft GCC vs. GCC High isn’t really a choice for defense contractors aiming for CMMC Level 2 compliance. GCC High is the only Microsoft cloud instance that lines up with the compliance requirements.

Yes, it’s more expensive. Yes, it’s a pain to migrate. But “close enough” doesn’t pass audits, and it doesn’t win contracts.

CMMC isn’t just a licensing, or even an IT, checkbox. It’s a risk management framework. If you want to protect your contracts and your data, GCC High compliance is the way forward.

At Agile IT, we spend a frankly absurd amount of time thinking about Microsoft licensing for defense contractors (so you don’t have to). We’ve helped primes and subs navigate GCC High migrations, licensing pitfalls, and CMMC assessment prep.

Schedule a consult with Agile IT and let’s figure out the right path for your organization — without blowing up brains (yours or mine). You ready? LFG.