Virtual data rooms have been one of the most helpful business solutions in the 21st century. Initially, there were more offline data storage facilities. Still, with time, the introduction of AI and other unique features have made virtual dataroom software complete business solutions catering to multiple corporate needs.
Back in 2018, the global virtual data room market was valued at a whopping $1.3 billion, and this value is projected to hit the $3.63 billion figure by 2026.
So the question arises, why has online data room software become a “business hold” name in the last ten years or so? Why is it different from its counterparts?
As a business owner, you would love to know more about this result-oriented and highly efficient business tool. That is why we will discuss everything you need to know about online data rooms. Let’s begin this value-packed guide on VDRs.
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What is a Virtual Data Room?
The definition of a virtual data room, or simply a data room, can be categorized as follows:
- An electronic data room is a secure, remotely accessible cloud-based data repository that allows the users to upload, store, and manage business data. The data can be in documents, images, audio, videos, etc.
- It is also a virtual working space where employees can collaborate on a centralized platform. Modern virtual data rooms provide audio and video conferencing options, group, and one-on-one chats, etc.
- Third, virtual data rooms also serve as an online deal-making platform where business sectors such as M&As, real estate, etc., can directly deal with their clients.
So, it is evident that VDRs are secure data repositories and mega B2B solutions. Our next chapter is about data rooms benefits.
Advantages of Virtual Data Rooms for Business
Explaining each benefit of a virtual data room will take a lot of time, so we mention some of the most important ones.
Data storage with unbreakable security
As mentioned earlier, virtual data rooms are primarily secure online data storage. You may wonder why a business would invest in a data storage facility when there are so many free options?
Cybercrimes on a high
The revolution in digitalization also brought cyber security threats with it. Cybercrimes have been on the higher side than ever before. The biggest cyberattack affected the world’s most extensive email service, Yahoo, where the credentials of millions of users were compromised. Can you imagine such a thing happening to your business data?
The good thing is, unlike other online storage facilities, virtual data rooms are not just standard repositories. That is because registered or certified data room providers comply with international data security standards, such as SOC2, FINRA, ISO27001, etc.
Here is how data rooms protect your data;
- Two-step verification. All the certified virtual data rooms restrict unauthorized entry with the help of two-step verification.
- Data encryption. The users in the data room can share or exchange data in encrypted form.
- Digital watermarking. It makes sure nobody can copy someone’s work without permission. It settles copyright issues.
Virtual data rooms allow the management to limit or restrict user access according to their needs. The administration can set restrictions on accessing any specific document or even a particular page or section of that document.
Furthermore, it is easy to restrict users from editing, modifying, altering, downloading, or printing any document by applying the “view only” option. Some top-notch virtual data rooms, such as Merrill, iDeals, etc., don’t allow users to take screenshots of the data room screen.
This feature is handy for M&A firms, real estate agents, IPOs, fundraising, etc.
Better user collaboration and improved workflow
Virtual data rooms are futuristic virtual workspaces with a long list of different collaboration tools. For example, virtual data room users can work on a shared document, and the content will be auto-saved.
Communication and data management
Similarly, the management can hold meetings with employees through audio and video conferencing options. Furthermore, VDRs provide different modes of communication. You can engage in a one-on-one chat or start a group discussion.
The management can automate the document management process. For example, if a document needs to be signed by multiple users, the management can automate the process, and the file will be signed and shared sequentially.
Better document accessibility
Virtual data rooms can save your precious time, which you may waste searching for a document. VDRs allow the users to search a file by just entering the name or keyword in the search bar and accessing the file in seconds.
Businesses, especially the small ones or the startups, constantly find themselves on a tight budget. So does that mean virtual data rooms are not for them? No, small businesses can benefit from data rooms in different ways.
- Paper cost
- Printing cost
- Stationery cost
- Storage space cost
Of course, you will need physical storage space if you use paper documents. Hospitals, banks, law firms, and other financial institutions must keep years-old records as a legal requirement.
Data room providers usually have flexible pricing plans for different types of users when it comes to pricing. Some data room services specialize in providing services to small and medium businesses, while others mainly target enterprises and corporations.
Virtual data rooms provide a secure place to store business data, but they are beneficial business solutions.
Many business owners often ignore the underlying benefits of virtual data rooms. Improved workflows and better collaboration between employees enhance productivity. Similarly, data security can save different businesses from lawsuits.
In a nutshell, virtual data rooms are an advantageous investment for any business.
Freelancer Michael Franco writes about the serious and silly sides of science and technology for CNET and other pixel and paper pubs. He’s kept his fingers on the keyboard while owning a B&B in Amish country, managing an eco-resort in the Caribbean, sweating in Singapore, and rehydrating (with beer, of course) in Prague. E-mail Michael.