Virtual data rooms are document storage repositories for businesses. This statement gives the impression that data room software is just an ordinary repository to secure documents. While in reality, online data room software is much more than that.
Free online repositories like Dropbox would be enough if it were just about data storage. But the fame of virtual data room software in the global corporate sector is backed by many other reasons.
In this draft, you will explore the virtual data room technology, what it is used for, and some of the best virtual data room providers.
What is virtual data room (VDR) software?
Virtual or electronic data room software is primarily a cloud-based, secure document repository for data storage, management, sharing, and data distribution. Virtual data room solutions are employed by companies, professionals, managers, directors, nonprofits, and government institutes.
Moreover, all modern-day data room services mostly boast digital communication tools for businesses. They may include meeting management tools such as agenda and minutes builder, presentation mode, task manager, audio and video conferencing tools, etc. Other notable modes of communication include live polls, chat messengers, and Q&A modules.
Virtual data rooms are easily distinguishable because of their security. Secure VDR solutions are hosted by certified data room vendors who strictly comply with cybersecurity and digital data management standards such as ISO, HIPAA, FISMA, FINRA, GDPR, SOC1, SOC Type II, SSAE, etc.
What do companies use virtual data rooms for?
1. Data storage
Data storage is the primary usage of virtual data room technology. The companies use VDRs as their primary data repositories or use them for highly confidential privileged information. Many businesses integrate data rooms with their existing data management solutions for better functionality, as VDRs allow remote access from anywhere.
2. Data protection
As stated above, companies employ VDRs to protect their privileged information due to the supreme security measures of online data rooms. These documents may include intangible assets, patents, product prototypes or project feasibility reports, marketing strategies, scientific formulae, etc.
Virtual data rooms have exemplary security features like document access control, fence view mode for documents, two-factor authorization, document shredding and access revocation, device purging, IP access restrictions, and digital watermarks.
3. Data sharing and distribution
Due to their impeccable data security, virtual data rooms are a preferred option for confidential data sharing, especially during business transactions. Data room software provides the luxury of sharing or distributing thousands of files in a quick time.
Also, many data room vendors even allow you to share large files (up to 50 GB). Email providers or other free data-sharing tools generally allow you to share files up to 100MB. Also, you can share files with hundreds of recipients in one go.
4. Due diligence and project management
The biggest use cases of online data room technology come in the form of project management, such as M&As, litigation, joint ventures, fundraising, corporate partnerships, and real estate management.
During such transactions, especially in due diligence, corporations employ data rooms for bidding, prospecting, communication, data sharing and verification, negotiation, data analysis, Q&A sessions, etc.
5. Virtual workspace
Data rooms make great virtual workspaces for low-budget companies or firms that prefer remote working. That’s because VDR minimizes the need to rent physical spaces required for traditional administrative tasks.
Companies use this technology as an online workspace where they can arrange their meetings, discuss ideas, share, access, and store data, and assign and manage their tasks. In addition to that, independent service providers, remote contractors, and freelancers use online data room software for communications and project management.
6. Board communications
An electronic data room is the go-to board management software for the corporate sector. VDRs help management in many ways. First of all, corporate boards use virtual data rooms as the central document repository where they store board materials.
Second, virtual data rooms act as board meeting management solutions. They help boards plan and manage their meetings from start to end. All the best data rooms in the market possess a wide range of meeting management tools like:
- Meeting minutes and agenda builder
- Task manager
- Electronic signatures
- Voting tools
- Live polls
- Presenter mode
- Document annotation features
- Screen recording
Virtual data rooms also act as a base point for boards during external dealing and deal management.
Data rooms are a great auditing tool for internal and external audits. The management can easily upload and control the documents required for audit, and the auditors can access them from anywhere, anytime.
Some of the best data rooms in 2022 include iDeals, Merrill Datasite, SecureDocs, Ansarada, DealRoom, FirmRoom, Firmex, Digify, IntraLinks, and ShareVault.
The corporate sector employs virtual data rooms for data storage, data sharing, board communications, auditing, deal management, due diligence, and as virtual workspace. Such multi-purpose use makes virtual data rooms a universal data storage solution for corporate and individual needs.