A virtual data room or data room is a cloud solution especially made for the secure storing and sharing of confidential business information. Data rooms offer specific sets of features such as advanced permissions, Q&A tool, notes and bookmarks, as well as multiple factor authentication and watermarking. Although virtual data rooms are traditionally employed for financial transactions, IPOs and real estate asset lifecycle management, their use cases have been expanding over the past decade. Potentially any business concerned with the secure and specialised management of its documentation can turn towards data rooms. Today, data room providers are increasingly building machine learning technology into their software, thereby enlarging their offer to include tools such as automatic document translation, findings management and automatic red flag analysis.
Everything you need to know about virtual data rooms
What functionality should
a data room have?
The overall concept and functionality of different data rooms may be similar to each other; however, each provider and data room have functions that fit specific use cases. Each user will also come with their own expectations and needs and therefore, it can be impossible to pin down what the most important features of a virtual data room are -- it really depends on the project and the user.
Nevertheless, virtual data rooms have a core functionality which is the easy and secure upload, saving and management of multiple files. The files can range from documents to business letters and diagrams; all sorts of information transfer can take place in a data room. The important thing is that this happens smoothly and safely.
It’s also about the intuitiveness of use. If the virtual data room comes with simple and easy-to-understand workflows, the user experience will be positive. This, in turn, will play an important part in the success of the negotiations. If the setup in the data room doesn’t have an intuitive and easy feel, the project participants will need to put more effort into uploading, saving and managing the files. This can hinder and slow down the project’s flow.
How much does a virtual data room cost?
The cost of a virtual data room varies greatly depending on the provider. A number of providers offer free trial versions. This allows for the opportunity to test the product and make a better decision on the data room’s suitability for a specific project.
Many providers offer virtual data rooms with a monthly subscription fee and flexible notice periods. However, flat rates are also available. Some providers have personalised offers that take into account things like how much data was consumed in a month and how many users are operating in the data room, as well as specific requirements.
There is one simple distinction between standard cloudstorage and a virtual data room. For uploading and sharing non-confidential documents, a regular cloud storage can be a more cost-effective solution. However, if you’re dealing with sensitive information, you require complex rights management and Q&A features, and if you’re managing large amounts of documentation, a virtual data room is the solution you need.
When assessing the costs, you should find an answer to these three questions:
What data room features
do I need?
Perhaps you only require data storage or you might look for enhanced security functionalities, such as the use of two-factor authentication.
What kind of customer support
and services will I require?
Providers offer different levels of customer support – some around-the-clock, while others a more limited contact. There are also differences in how you can get in touch. Certain providers offer a range of contact methods from phone to Skype connectivity.
What types of project
will I perform in the data room?
You don’t want to spend as much money on one-off projects as you do with ongoing or more business-sensitive projects. You also need to consider if your projects require file sharing without enhanced security features.