In today’s fast-paced digital world, one of the most popular trends that have been prevalent is the use of virtual data rooms. What’s more impressive is that the market of digital data rooms is expected to grow by $2.7 billion by 2025. The reason behind such significant growth is that business data volumes have increased over time. Digital data rooms have become one of the powerful, reliable work tools in the business world as they provide a secure platform for companies to store and share sensitive information.
Here’s all you need to know about virtual data rooms and how they are key to your company’s success.
What is a virtual data room?
A virtual data room, also known as an electronic data room or a digital data room, is a SaaS solution that enables businesses to store and share sensitive corporate information.
It is an online repository that gives its users the ability to control who can access documents and other important data, which makes virtual data room software valuable for financial transactions such as IPO, fundraising, M&A, etc.
How do virtual data rooms and other platforms compare?
The following table will give you a better picture of how online data room software is still better than other virtual platforms.
|Totally secure||Features for efficient working||Up and running quickly||Management needed|
|Physical data rooms||No||No||No||Substantial|
|Online sharing platforms||No||Yes||Yes||Significant|
|Virtual data room||Yes||Yes||Yes||Minimal|
Unlike other systems, virtual data rooms give users full control over the company’s information as documents cannot be leaked or copied.
What is the difference between cloud storage and a digital data room?
There isn’t much difference between the two; for uploading and sharing non-confidential information, cloud storage can be a little more cost-effective. However, data room vendors can be very handy when it comes to dealing with strategic transactions and confidential data.
A digital data room is the solution to your business woes if you are looking for innovative features such as Q&A, annotation tools, document management, and managing a large volume of databases.
Also, the right data room vendor offers maximum security in line with the highest security standards according to General Data Protection Regulation (GDPR) and ISO 27001:2013 certification.
How much does a digital data room cost?
The cost of a digital data room solely depends upon the data room vendors and what features you are seeking in a platform. With that, opting for free trials can help you test the product whether the platform is working out for your project or not.
Moreover, when assessing the costs, you need to prioritize the following things:
- What kind of customer service do you need? Data room providers offer different levels of customer services and support. Some offer limited contact, while others are always around-the-clock. Before investing in virtual data room software, do check if they have a dedicated customer support system available in multiple languages, communication channels, and at any time.
- What type of features do you need in a VDR? Perhaps you are looking for a data-sharing storage platform, or you want an electronic data room with more functionalities such as API integration, multiple-factor authentication, and so on. It is worth investing in a solution that addresses your specific business needs.
- What kind of projects will you be running in a digital data room? You won’t spend as much on one-time projects as you do on lasting business-sensitive initiatives. Also, consider if you want a platform for basic data storage or the one with enhanced features. This will influence the data room cost, and therefore your choice of the right solution.
Digital data room: The document management revolution
What sets virtual data rooms from other contemporary platforms or physical data rooms is:
- More than storage and file sharing. Online data room software isn’t only about storing, collecting, and sharing information with board members. They integrate seamlessly with other platforms to enable drag-and-drop functionality and two-way syncing that gets the room operational in minutes.
- More than labor work. Let AI (artificial intelligence) do the heavy lifting. It powers and automates much of the work for you. Automated scorecards not only help in automating financial and other reports, but they also predict outcomes when utilizing an electronic data room for selling products/assets.
- Transition from paper documentation to online data management. Digital data rooms are very handy, especially for paper-intensive transactions when different businesses are involved, such as M&As, loan syndications, equity, etc. These data rooms help you digitize the documents, saving you a lot of time and other valuable resources.
- Secure sharing of files and tracking. Virtual data rooms are ideal solutions for the secure sharing of essential business documents. They enable you to:
- Control how many times a user can access the files
- Monitor the log-in activity of team members
- Put watermarks on documents for security purposes
- Apply download, view, and printing restrictions on files
- Global accessibility. Digital data rooms are hosed over the internet; anyone can access the database regardless of location. It enables businesses from all over the world to access vital information and help them make informed decisions, not depending on where they are.
- Expedite process. Organizing, editing, and checking data from time to time are crucial elements for any business deal. It’s no wonder it takes time and may stifle the pace of the work. Thus, due diligence needs to be performed properly for a successful business transaction, and the digital data room’s ability to streamline the collaboration will enable this.
Best data rooms in 2022
Following is the list of some of the best data room providers that can take your business ahead of the competitors:
Be sure to conduct your own data room comparison to find a solution that fits your particular needs. Hopefully, virtual data rooms will make it much easier for every member of your team to share, download, store, and exchange essential business documents.
As you can see, the hype around a digital data room is real. Since no other virtual platforms can speed up and streamline the business deals the way digital data rooms can. However, the key is to find the solution that fits the needs of your business. Do not fall for a low-hanging fruit and do your research to invest in the best virtual data room software.
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