Cloud storage is a revolutionary way for people to store their data. The sheer concept of storing your data anywhere/anytime and accessing that data anywhere/anytime was enough to make heads turn. And while storage clouds sure are getting a lot more secure, major companies cannot rely on cloud storage for sensitive information.
In an incredibly competitive space, companies are willing to do anything to stay afloat or gain an advantage. So stealing or copying the idea of a rival is not far from the worst thing that companies are willing to do to have the upper hand.
So to keep their company’s secret, well, a secret, companies often have to rely on the ancient concept of a physical data room with hardcopies no one can steal.
Of course, with technology advancing at an unprecedented rate, one of the fairly newer innovations came in the form of virtual data rooms. And it is taking businesses by storm.
What Are Virtual Data Rooms?
Virtual data rooms, much like regular data rooms, is a secure space where companies can keep all of their sensitive information.
To better understand how this works, you can check out m&a news. The data room, sometimes dubbed the deal room, is also where one party can share documents with another, without worrying about someone leaking the information.
With minimal people allowed inside the virtual data room, there is a lower risk of people leaking information. And since the admin controls who has access to the site at all times, they can cut someone out quickly. With these virtual data rooms providing a premier security experience, it is easy to see why it is so popular among companies.
Benefits of Virtual Data Rooms
These data rooms provide a slew of benefits for all parties involved, other than, of course, the intended advanced security measures. Here are some of the benefits to virtual data rooms:
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- Quick setup: Virtual data rooms can be set up and running within minutes. Most providers have a customer success staff that provides onboarding and any additional training needs.
- Easy navigation: Virtual data rooms have folders, and all of the information can be arranged as the admin sees fit, making them much easier to navigate through. Many virtual data rooms also have a site-map that lists out the entire break-down of the room with live-links.
- Artificial intelligence: Many platforms have been incorporating artificial intelligence into their data room, which saves users valuable time. This includes full-text search, suggested files, live-linking, document recall, and more.
- Flexibility and control: Admins of a virtual data room can easily choose who gets to see what, and the command prompts that they can use in their browser. They can grant other users specific roles, and roles can be updated at any time.
- Easy access: Virtual data rooms are easily accessible to designated people from anywhere. Regardless of the device that they are using or where they are, they can always access it.
- Bookmarked files – Instead of searching through email threads for one document, users can bookmark files they use frequently for convenient access.
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- Drag and drop upload – With virtual data rooms, teams can upload multiple files and documents quickly using drag and drop upload. They can also use drag and drop to rearrange an index or move files into folders.
- Client confidence: The added security measures also instill confidence in clients, and show just how serious a company is about retaining data security. Many virtual data rooms come equipped with strict ID protocol, two-factor authentication, customizable allowances, date siloing, and more.
- 24/7: Virtual data rooms often come with 24/7 customer support via phone, chat, and email.
Virtual data rooms also prevent common finance software inefficiencies such as:
- Back-and-forth Excel trackers. Tired of sending an Excel tracker back and forth between team members? Innovative virtual data rooms completely eliminate the need for Excel trackers. All buyer requests can go through the platform, as well as progress updates and comments.
- One-off Emails. Sending one-off emails to ask simple questions is tedious and time-consuming. Instead of relying on email, teams can communicate about requests within the virtual data room. Users can contribute to a request by uploading files, answer a simple question, and more
- Email Attachments. No longer search through hundreds of emails just to find one file attachment, instead, all files are in the room. Virtual data rooms come with a search feature to help users find titles by name.
- Unclear roles. We’ve all heard the phrase, “Oh, I thought (insert co-workers name) was doing it.” Virtual data rooms allow users to set roles for each request such as assignee, reviewer, follower, etc. so you never have to guess who is doing what. If roles happen to change throughout the deal process, they can easily be reassigned and changed.
Business transactions of any kind should always be discreet and should not allow for third-parties to discover sensitive information. With the demand for VDR (virtual data rooms) now increasing, new startups are getting in on the action of the VDR market.
The Boom of the VDR Market and Its Changes on Businesses
With the virtual data room market now expanding rapidly, companies are starting to heavily depend on these data rooms to store information. And with more companies comes more competition, which brings competitive pricing.
Competitive pricing makes the software more accessible to smaller companies. But in the market, companies benefiting from this boom, the most are startups.
Startups are at a higher risk of losing valuable information, especially when they bring something new to the market. And since capital is a major concern, they can often never afford more expensive security applications. But with the rise in demand, these VDRs will be a lot more accessible to various companies.
Increasing the Pace of Decisions
With technology getting faster, it may not come as a surprise that companies are becoming more productive. Now, companies no longer have to go through a tedious physical process to ensure that other members of a transaction receive information without a third-party knowing.
Now, these same companies can access sensitive information through any device, at any time. This has led to firms making much faster decisions that can help them gain a competitive advantage. The market for virtual data rooms has expanded to the point where it is now available in a package along with other very useful tools.
Some popular workspace management software across the market includes DealRoom, Devensoft, Eknow, Intralinks, Ansarada, and Merrill. These software have some of the strongest encryption algorithms to keep information safe from hackers.
There are also new virtual data room providers popping up every year, and some are tailored to specific industries such as investment banking, real estate, accounting, legal, biotech, energy, and more.
Many platforms come with other useful tools such as diligence, pipeline, integration, and project management that help speed up processes and streamline external and internal workflows. They even offer services like cloud storage and almost complete admin control over the site.
The Future of Virtual Data Rooms
The future of virtual data rooms looks incredibly promising for both the firms making them as well as the companies using them. Since its eruption onto the scene took companies by surprise, it has garnered attention from all sorts of businesses, both big and small.
And while there have been alternatives like Google docs, they do not provide encryption or other security options that VDR provides.
Traditionally, virtual data rooms offer per page pricing. Teams predict how many pages they are going to upload to the room and literally count per page. However, in the next coming years, it is predicted that more virtual data room providers will switch to a SaaS model.
Instead of users using a different virtual data room for each transaction, they will use the same platform every time. This will help prevent steep learning curves, page counting, and high invoices.
Virtual data rooms have managed to single-handedly revolutionize the way businesses share information and how they make deals. Thanks to real-time access to relevant information and lack of any paperwork whatsoever, companies can go about their work much faster.
Moreover, companies not only prefer using virtual data rooms as a better replacement for physical data rooms but have somewhat depended on it. Since virtual data rooms are still a relatively new market, there is plenty of room for it to grow.
Virtual data rooms are already capable of allowing companies to both communicate and store data on the same platform, creating a virtual space for meetings.
Conclusion
In the future, this software can turn into a centralized hub where communication and security can go hand in hand. Virtual data rooms can become a virtual office space where employees and teams from all over the world can communicate with each other and share encrypted files and information without having to worry about leaks.
In conclusion, the virtual data room boom has been quite beneficial to every business of every size, ensuring security that only a few others can offer.
Author’s Bio: Lori Wade is a writer who is interested in a wide range of spheres from business to entrepreneurship and new technologies. If you are interested in M&A or virtual data room industry, you can find her on Twitter & LinkedIn or find her on other social media. Read and take over Lori’s useful insights!