SC-7(29): Separate Subnets to Isolate Functions

The sc-7(29): separate subnets to isolate functions requirement is a network segmentation requirement inside NIST SP 800-53 Rev. 5. It is straightforward in concept but easy to fail in an assessment because teams stop at “we have VLANs” and can’t show that the VLANs meaningfully isolate critical functions, are consistently used, and are enforced through firewall rules, security groups, routing tables, and access pathways.

For a Compliance Officer, CCO, or GRC lead, the operational goal is to turn a broad control statement into three concrete outputs: (1) a scoped list of critical components/functions that must be isolated, (2) a segmentation design that clearly separates those functions into distinct subnetworks, and (3) durable evidence that traffic between those subnetworks is intentionally controlled and periodically validated.

This page gives requirement-level implementation guidance you can hand to network and cloud teams, then reuse for audit and continuous compliance. It assumes a mixed estate (on-prem plus cloud) and focuses on how assessors typically test this control: “Show me the boundaries, show me the enforcement points, and show me proof it works.”

Regulatory text

Requirement (SC-7(29)): “Implement {{ insert: param, sc-07.29_odp.01 }} separate subnetworks to isolate the following critical system components and functions: {{ insert: param, sc-07.29_odp.02 }}.” ¹

What the operator must do

You must (a) decide how many separate subnetworks you need, and (b) define which “critical system components and functions” are isolated by those subnetworks. Then you must implement the segmentation in your actual network stack (routing, firewalling, security groups, NAC/microsegmentation where applicable) so that the separation is enforced—not just described. ¹

Plain-English interpretation

SC-7(29) expects you to reduce blast radius. Put critical functions in distinct network segments so that if one segment is compromised (workstations, a DMZ web tier, a third-party integration host), an attacker can’t freely pivot into crown-jewel systems (identity, key management, databases, OT/ICS control networks, payment processing, admin planes).

Isolation is functional. A subnet boundary that still allows “any-any” traffic, broad peering, or unrestricted east-west routing does not achieve the intent, even if the IP ranges are different. In practice, assessors look for three things:

1. Clear segmentation rationale (why these functions are separated).
2. Technical enforcement (how traffic is restricted across segments).
3. Proof of operation (reviews, tests, and change control showing it stays that way).

Who it applies to

SC-7(29) commonly applies where you align to NIST SP 800-53, including:

• Federal information systems (agency-operated environments).
• Contractor systems handling federal data (including cloud-hosted systems supporting federal missions). ²

Operational contexts where it matters most:

• Multi-tier applications with separate web/app/data layers.
• Environments with privileged administration (jump hosts, admin consoles).
• Systems with external connectivity (B2B, third-party integrations, public APIs).
• Hybrid networks with on-prem to cloud connectivity (VPN/Direct Connect/ExpressRoute equivalents).
• Regulated enclaves (CUI-like segmentation patterns, even when not explicitly named in your program).

What you actually need to do (step-by-step)

1) Define “critical components and functions” for your system

Create a short, reviewable list. Don’t start with every server; start with what would cause material impact if compromised. Typical candidates:

• Identity services (directory, SSO, MFA, federation)
• Key management / HSM / secrets stores
• Databases with sensitive data
• Administrative endpoints (management consoles, hypervisor management, Kubernetes control plane access paths)
• Logging/SIEM collectors
• Payment or regulated processing zones
• Remote access pathways (VPN concentrators, bastions/jump boxes)

Operator tip: Write down the criteria you used (e.g., “stores sensitive data,” “controls access,” “administers infrastructure,” “externally reachable”). This becomes your assessor narrative.

2) Choose a segmentation model that matches your architecture

Pick the simplest design that enforces isolation:

On-prem patterns

• VLAN/subnet per function (e.g., user, server, management, backup, DMZ).
• Firewall or internal segmentation firewall between VLANs.
• Separate routing domains where needed.

Cloud patterns

• Separate subnets per tier inside a VPC/VNet.
• Separate VPCs/VNets for high-risk functions (shared services vs app workloads).
• Security groups / NSGs plus route tables to constrain east-west paths.
• Explicit egress control (NAT gateways, firewall appliances, or managed egress).

Hybrid patterns

• Treat the cloud edge like a boundary: restrict which on-prem networks can route to which cloud subnets, and vice versa.
• Avoid broad “allow all RFC1918” tunnels without internal segmentation.

3) Translate “isolate” into specific traffic rules

For each subnet pair, define:

• Default stance: deny by default across segments unless explicitly required.
• Allowed flows: document protocol/port/source/destination and business justification.
• Administrative access: force it through dedicated management subnets and bastions.
• Third-party access: terminate into constrained integration subnets, not directly into critical zones.

A lightweight way to do this is a segmentation matrix:

Source subnet	Destination subnet	Allowed?	Ports/Protocols	Control point	Business justification
Web tier	App tier	Yes	App-specific	Security group + firewall	Serve requests
User subnet	Database subnet	No	N/A	Firewall	Prevent direct access
Management subnet	All critical subnets	Yes (restricted)	Admin ports	Bastion + MFA + firewall	Admin only

4) Implement the subnetworks and enforcement points

Network team tasks should include:

• Create subnets/VLANs (or VPC/VNet subnets) mapped to each critical function.
• Configure routing to prevent “flat” reachability.
• Implement firewall rules/security groups that enforce the segmentation matrix.
• Implement ingress/egress chokepoints for internet-facing or third-party facing zones.
• Align DHCP/IPAM, DNS, and naming conventions so assets don’t drift into the wrong segment.

5) Validate isolation with testing that matches attacker paths

Assessors often ask, “How do you know it’s isolated?” Have a repeatable answer:

• Attempted connections from a non-authorized subnet to a critical subnet should fail.
• Authorized flows should succeed and be logged.
• Validate from representative endpoints (a user workstation segment, a web server segment, a third-party integration segment).

You can satisfy this with a mix of:

• Network scan evidence (where permitted),
• Firewall rule verification output,
• Connectivity tests and screenshots/logs,
• Microsegmentation policy verification (if used).

6) Operationalize: make segmentation durable under change

Segmentation often degrades via emergency changes and broad rules added “temporarily.” Put controls around it:

• Change requests must reference the segmentation matrix row being changed.
• A periodic rule review cadence for inter-subnet policies.
• A process to approve new subnets and to classify systems into the right segment.

Where Daydream fits naturally: track SC-7(29) ownership, your segmentation matrix, and the recurring evidence checklist in one place so you can produce consistent, time-bound proof during assessments without rebuilding the story each time.

Required evidence and artifacts to retain

Keep evidence that proves both design and operation:

Design evidence

• Network architecture diagrams showing subnet boundaries and enforcement points.
• Inventory list of “critical components/functions” and the subnet mapping.
• Segmentation matrix (allowed/denied flows with justifications).
• Standards/guidelines for subnet naming, IP ranges, and “where systems belong.”

Operational evidence

• Firewall/security group/NSG rule exports or screenshots with timestamps.
• Route table exports showing restricted routing paths.
• Change tickets for segmentation changes (including approvals).
• Test results demonstrating blocked lateral movement and allowed required flows.
• Periodic review records (rule reviews, exception reviews, recertification sign-offs).

Audit practicality: Save artifacts in a stable location with version history, and tie each artifact to SC-7(29) in your control library so you can answer “show me” requests quickly.

Common exam/audit questions and hangups

Expect questions like:

• “Which components did you classify as critical, and why?”
• “Show the subnets/VLANs/VPC subnets that isolate those functions.”
• “Where are the enforcement points? Firewalls, security groups, route controls?”
• “Is your default inter-subnet posture deny-by-default?”
• “Do third parties land in a constrained network zone?”
• “How do you prevent drift (new servers created in the wrong subnet)?”
• “Show evidence this was tested or reviewed.”

Hangups that slow teams down:

• Diagrams exist, but configs don’t match diagrams.
• Cloud security groups allow broad internal access, undermining “separate subnetworks.”
• Overuse of exceptions without documented business justification.

Frequent implementation mistakes and how to avoid them

Mistake	Why it fails SC-7(29)	How to avoid it
“We have multiple subnets” with permissive routing	Separation exists on paper, not in enforcement	Implement deny-by-default controls between segments
Segmentation done only at the perimeter	Lateral movement inside the environment stays easy	Add internal segmentation between critical functions
Critical assets not defined	You can’t prove what was isolated	Maintain a reviewed list and mapping to subnetworks
Third-party connectivity placed into “shared services”	Expands attack surface into critical zones	Terminate into dedicated integration subnet(s) with narrow allow rules
No recurring review	Rules accumulate and flatten segmentation	Run periodic rule and exception reviews; remove unused flows

Enforcement context and risk implications

No public enforcement cases were provided in the source material for this requirement, so you should treat SC-7(29) primarily as an assessment and risk-reduction expectation under NIST SP 800-53 rather than a control with a specific published penalty history. ²

Risk implications are still concrete:

• Flat networks amplify the impact of credential theft and remote-code execution.
• Overbroad east-west access increases the chance that a compromise of a low-trust segment reaches high-trust systems (identity, keys, sensitive databases).
• Weak segmentation complicates incident containment and recovery because you lack clean boundaries to isolate.

Practical execution plan (30/60/90-day)

Use phases rather than fixed calendar promises. Treat these as execution checkpoints you can adapt to your change windows.

First 30 days (Immediate: define and design)

• Assign a control owner for SC-7(29) and name the network/cloud implementers.
• Define “critical components/functions” for the system and get sign-off from security architecture.
• Produce a current-state network map (on-prem and cloud) that shows where critical assets live today.
• Draft the segmentation matrix with deny-by-default intent and list required flows.
• Identify fast wins: obvious “any-any” rules, broad peering, shared subnets mixing critical and non-critical workloads.

Day 31–60 (Near-term: implement and document)

• Create or refactor subnets to separate critical functions.
• Implement enforcement rules at the right layer (firewall, security group/NSG, route controls).
• Put third-party connectivity into constrained zones.
• Update diagrams to match actual configs and store versioned exports of key rule sets.
• Write a short operating procedure: how new systems are placed into subnets, how exceptions are requested, who approves.

Day 61–90 (Ongoing motion: validate and sustain)

• Run and record segmentation validation tests (blocked and allowed flows).
• Establish recurring reviews for inter-subnet rules and exceptions.
• Add segmentation checks to build/deploy patterns (templates, IaC guardrails, or pre-change reviews).
• Package evidence for assessors: one folder (or Daydream control record) that contains diagrams, matrices, configs, tickets, and test outputs.

Frequently Asked Questions

Does SC-7(29) require physical separation or separate hardware?

No. The text requires “separate subnetworks,” which is commonly met with VLANs/subnets plus enforced controls. Physical separation can help, but assessors usually focus on whether isolation is real and provable. ¹

Are VLANs enough to satisfy sc-7(29): separate subnets to isolate functions requirement?

VLANs can be part of the answer, but only if routing and firewall/security controls enforce restricted traffic between them. A VLAN design with permissive inter-VLAN routing typically fails the intent.

What counts as “critical system components and functions”?

Your program must define it for your system. Start with identity, key management/secrets, sensitive databases, admin planes, and logging pipelines, then document the criteria you used and keep it consistent across reviews.

How do we handle required cross-subnet application flows without breaking isolation?

Allow only the specific ports/protocols required, from specific sources to destinations, and document the business justification in a segmentation matrix. Deny everything else and log the allowed flows.

How should third-party access be segmented?

Terminate third-party connectivity into a dedicated integration subnet or DMZ-like zone, then allow narrowly scoped access into internal tiers. Avoid placing third-party connections directly into management or shared services networks.

What evidence do assessors usually accept for testing isolation?

A combination works well: rule exports, route tables, and recorded connectivity tests that show blocked lateral movement paths plus successful authorized flows. Keep timestamps and link the tests to the specific subnets and rules under review.

Footnotes

1. NIST SP 800-53 Rev. 5 OSCAL JSON

2. NIST SP 800-53 Rev. 5