However, are virtual data rooms only effective for mergers and acquisitions? Data room software is a multi-dimensional solution that can cater to the different needs of all types of businesses. Read on to explore the virtual data room world.
What is virtual data room software?
Virtual or electronic data room software is a secure online platform commonly used for centrally controlled data storing, sharing, and management. In broader terms, virtual data rooms are a combination of multiple technologies. A virtual data room is a:
Cloud-based data repository where any business, professional, government organization, trust, or nonprofit can store, share and manage its documents in real-time.An online communication channel that facilitates business communication in different ways. It boasts multiple individual and group communication tools that may include data room messenger, group chat threads, slack integration, Q&A modules, and video or audio conferencing tools.An internet-based deal-making platform where businesses take on transactions like mergers, acquisitions, capital raising, joint ventures, partnerships, initial public offerings, portfolio management, and real estate trades.
Virtual data rooms are commonly used for data-heavy transactions, such as mergers and acquisitions, due diligence, fundraising and initial public offerings, venture capital, investment banking, licensing, and real estate. To learn more about virtual data rooms in the real estate industry, head over to: https://www.idealsvdr.com/virtual-data-room-real-estate/.
How are virtual data rooms different from other data-sharing platforms?
There are hundreds of free data sharing platforms like Google Drive, Dropbox, etc., so how are data rooms different? The first and the biggest difference is security in both options. Most of the free data sharing apps have third-party integrations, while virtual data rooms usually have none. Hacking attacks have often hit free data sharing tools; Dropbox, one of the biggest free data storing and sharing platforms, has been hit by 7 million hacked accounts to date. Imagine what can happen to your data on these platforms. Data encryption methods are usually different in virtual data rooms and free data sharing tools. Virtual data room providers employ 256-bit data encryption (the most advanced encryption method), while this feature is available in very few free tools. Apart from that, an electronic data room not only encrypts the file but the data in it, too; again, free tools do not have this option. Lastly, free data sharing tools don’t have built-in communication apps; data rooms are the winners, again.
What does a virtual data room do?
So what exactly does a virtual data room do? Here is the answer.
1. Virtual data room provides remote access
As we mentioned earlier, virtual data rooms are cloud-based platforms that can be accessed by anyone from anywhere (depending on the access permissions). Whether you are working from your home, office, or holiday destination, you can access your data rooms easily. What’s more, many modern-day data room vendors allow you to access data room documents without an internet connection. The best part is yet to come; you can access your data room through a dedicated mobile app. In short, all your business data is at your fingertips.
2. Virtual data room protects your business data
Security is what virtual data rooms are primarily famous for. All high-end data room services boast numerous security features employed for different reasons. That said, data room vendors not only protect your data room but the documents you store and share in it. For example, the two-factor authorization works as the first defensive element in the data room that restricts unauthorized logins. Depending on the suspected activities, the initial verification process may extend to more than two steps. The management in virtual data rooms has the right to restrict single or multiple users from accessing restricted folders, files, or pages. VDR administration can limit anyone from printing, downloading, saving, editing, copying, or sharing documents. Other notable security features include access revoke, digital watermarking, device deletion, scheduled document access, etc. It is important to remember that features do vary in different data room services. Therefore, compare virtual data rooms before subscribing to one.
3. Virtual data room facilitates seamless collaboration
If a business wants to ensure safe and centralized communication between its employees, then there is no better place than data room software. Users can share documents and make changes to them in real-time. Shared documents can be used if multiple users are working on the same project. Similarly, users can keep their communication within the data room software. They can use VDR messenger for individual or group chats, hold online business meetings, conduct Q&A sessions, and whatnot. On top of that, VDRs usually allow third-party app integration (but it has its own risks). Some of the best virtual data room providers include:
Final words
Online data room software is a highly secure, cloud-based data management solution that is primarily used for safe data storage, sharing, and online business communication. VDRs are commonly used in the financial, healthcare, education, and real estate sectors.
