Virtual Data Room Providers Overview

Gone are the days when organizations stored piles of papers in offices or other poorly protected physical spaces. Confidential documents were never safeguarded reliably enough from natural threats or an old-good human error often leading to the loss of data.

This is why virtual data rooms came to the rescue as the most innovative approach to information security – and no wonder they are dominating the market now.

TOP 5 Virtual Data Room Providers

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iDeals is one of the most popular and leading data room providers for managing corporate transactions and securely sharing data. iDeals unique data rooms are distinguished by providing exceptional customer experience, high security level, and data room software ease of use, which brought the provider a good reputation on the market.
  • bulk invitations
  • secure fence view
  • iOS and Android apps
  • multilingual access
  • time and IP access restrictions
  • Pro
  • Business
  • Enterprise
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Merrill Corporation data room provider offers end-to-end due diligence and M&A options that simplify the deal-making process. Also widely known as Datasite, it is one of the most trusted virtual data room providers serving more than 170 countries across the world.
  • full-text search in 16 languages
  • zip files bulk upload
  • text and image redaction
  • bulk permission management
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Box online data room focuses on delivering innovation to companies dealing with content. Namely, Box clients receive the latest technologies for the full document lifecycle, from creation contents to classification and retention.
  • unlimited e-signatures
  • 40+ file types
  • Salesforce integration
  • vector-based watermarking
  • Business
  • Business Plus
  • Enterprise
  • Enterprise Plus
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Intralinks is in the ranks of the cloud-based virtual data room providers for the capital market and global banking. Intralinks’ priority is to support strategic initiatives such as fundraising, due diligence, or mergers and acquisitions deals by protecting the flow of information in the online data room.
  • user-friendly AI redaction
  • intuitive Q&A
  • M&A workflow tool
  • digital rights management
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HighQ technology differs from other data room providers in high demand among law firms, as it helps to move legal processes forward. Specifically, the project management software combines enterprise-grade options and consumer-grade solutions to create an effective experience for online data room clients.
  • shared team calendars
  • iSheets capabilities
  • single sign-on
  • project dashboard customization
  • Essentials
  • Advanced
  • Premium

What is a virtual data room?

A virtual data room is a dedicated online space for secure cloud storage and seamless collaboration in a controlled environment. In fact, this is an online office for working on a project involving a significant amount of sensitive information and complicated workflows.

What makes virtual data rooms fundamentally different from other solutions is the bank-grade security.

Since document security is what small firms, medium and large businesses strongly need, virtual data rooms prove helpful in many industries. Some examples are investment banking, financial services, insurance, real estate, manufacturing, retail, government, healthcare, biotech, human resources, energy, and utilities.

Another point to underline is the defining aspects of virtual data rooms. 

Firstly, it is the ability to set secure data access permissions for other users, covering temporary guest access rights. It is of particular value when collaborating with external stakeholders, investors, or bidders.

Secondly, an online data room is accessible anywhere you can get an internet connection. Being hosted in the cloud, hundreds of confidential documents are within reach for all parties in the transaction. It makes this versatile solution indispensable when business needs to share and collaborate on data online.

Finally, the dataroom software’s greatest strength is its data sharing capabilities. Organizations can be sure about comprehensive security while sharing their most sensitive documents. Indeed, for the user’s peace of mind, data room providers use complex encryption mechanisms and comply with international privacy protection standards.

How to choose the best data room

While any secure virtual data room can benefit the user to some extent, the right choice of virtual data room software maximizes its value.

Although consumers are used to relying on the experience of others when choosing a particular product, here you need to show responsibility and a thoughtful approach. All the more so because this online platform is designed to meet and fully satisfy the individual needs and, therefore, it is not advisable to base your choice solely on virtual data room reviews.

So, here are detailed recommendations for you on how to choose the best of the best virtual data rooms. After all, whether you choose a virtual data room solution for due diligence or private equity deals, following these simple steps will benefit you.

  1. Determine your needs and priorities

Before selecting the best virtual data rooms, you should understand what you need to improve current practices. For example, companies dealing with sensitive data should put the main focus on solutions with reliable security features. Likewise, teams with a large volume of important information and users require a perfect collaboration platform with secure document management tools.

  1. Stick to your budget

Best data rooms are generally cost-effective, whereas pricing models differ. Therefore, deciding how much you are ready to pay to implement the virtual data room software is important. In addition, it is an easy way to narrow down a broad range of virtual data room solutions.

  1. Read virtual data room reviews

Virtual data room reviews contain valuable information about the VDR experience of users, which may help to make a choice. However, these data room review sites must be independent and provide frank and genuine information. Note that five-star ratings and no cons may indicate the untruthfulness of the virtual data room reviews.

  1. Contact the well-reviewed providers

Once you have compiled a list of eligible virtual data room providers after assessing your needs, budget, and reading virtual data room reviews, you may contact the data room provider via chat online or phone. Typically, potential customers ask about experience in a relevant industry, the functions they are interested in, and clarify pricing issues. Thus, you can not only get answers to your questions but also assess the level of competence and responsiveness of reps.

  1. Test best data room providers

It’s better to choose virtual data rooms with a free trial to know what you pay for. After all, a leading provider with nothing to hide will allow you to try out the usability, interface, and platform efficiency. Another positive aspect is that you can see how easily your colleagues adapt to virtual data rooms during a free trial.

It is important to note that some online data rooms offer a free demo. However, there is a drawback – a user can only see how the platform works, but not test it.

  1. Compare virtual data rooms

Now, at the final stage, it’s time to make a virtual data room comparison in terms of VDR’s functionality, data protection features for cloud storage, and technical support, including the following criteria:

  • Security. To ensure data security, clients need to check the data room provider’s compliance with ISO 27001:2013, SOC 1 or 2, GDPR, and HIPAA. But apart from compliance, the list of options should cover data encryption both at rest and in transit, dynamic watermarking, and data room backup. Also, VDR vendors should provide users with advanced permissions, the ability to restrict access by time and IP, a remote shred tool, audit logs, and advanced user analytics.
  • Convenience. This aspect lies not only in the intuitive interface but also in a number of other convenient opportunities. Some of them are ease of virtual data room setup, automatic indexing, bulk uploads, drag and drop files, and advanced search across all data. Besides, sometimes a feature set may include a wide range of formats support, multiple languages, login without creating an account, and a single set of login credentials.
  • Accessibility. Colleagues and partners work not only in the office and pretty often change their location. For this reason, virtual data room services should be available on any device – computers, laptops, tablets, mobile devices, and operating systems – Windows, Linux, Mac, Android, and Apple iOS.
  • Integrated apps. The best data room providers allow you to simultaneously work in other well-mastered applications, which can significantly expand collaboration capabilities, upgrade documentation management, and speed up processes. For example, it can be such built-in tools as Salesforce, Microsoft Office, Microsoft OneDrive, Google Drive, Slack, Zoom, etc.
  • Support. Efficient data room provider support consists of 24/7 availability of experienced experts, multiple supported languages, fast processing of customer requests, and free access to a rich knowledge base. You should also ask the data room provider about team training and the onboarding process since some platforms still require IT skills from new users.

So, taking into account the company’s needs, financial capabilities, virtual data room reviews, experience during the trial, and virtual data room comparison results, a user has every chance to choose the best and most secure data room provider. This way, a company can get a head start over others attracting investors with a strong base for the due diligence process.

VDR benefits compared to alternative solutions

Some directors who share sensitive data on a day-to-day basis still use file-sharing platforms. It would be okay if there were no threat of breaches due to the insecurity of such platforms. 

So, this brings us to the main difference between virtual data rooms and other solutions – document security, but first things first.

Virtual data rooms compared to data sharing platforms

  • Virtual data room. As mentioned, virtual data rooms are a permission-based online repository for sharing sensitive data with dozens of different features for secure collaboration and business teamwork.
  • Data-sharing platform. Data-sharing services allow you to create and share documents across devices, taking advantage of automatic sync and multiple user access. However, they don’t have that many necessary features when compared to the VDR offers.

Typical features for document management

  • Virtual data room. Data rooms are explicitly built for business and its security, so there are granular permissions based on roles. In other words, managers control the options for creating, sharing, editing, viewing, and printing content. What’s more, the user activity tracking audit trail makes all processes transparent.
  • Data-sharing platform. The product provides easy access to all the documents needed, sharing in a few clicks, version control, and limited access. However, there are no granular user permissions and tools for monitoring data flows or authorized users. As a result, administrators can’t track activities and incoming or outgoing documents.

Security options

  • Virtual data room. Additional layers of protection such as a physical data security system, a firewall, above 99.9% VDR’s uptime, sophisticated encryption mechanisms, two-factor authentication, complex passwords, access control, private cloud solutions, and a built-in NDA make the virtual data room software hack-resistant.
  • Data-sharing platform. Some solutions offer encryption, SSL, virus scanning options, and relatively secure data centers. But all the same, these characteristics do not exclude leaks since the platform is not designed for storing and exchanging important data. Furthermore, scandalous cases of data attacks on world-famous companies are known, which resulted in millions in damages.

Collaboration tools

  • Virtual data room. First, all virtual data rooms allow collaboration and board communications without relying on email. Additionally, a company can use the FAQ section as a resource for insights. And finally, the power of Q&A as a user-friendly multifunctional tool for safe information exchange during the business transaction helps to keep essential projects running smoothly without no effort.
  • Data-sharing platform. With document-sharing workspaces, you can leave comments, tag team members, share individual and multiple files and folders, and create shared to-do lists. But often, customers need a lot more for online due diligence processes, mergers and acquisitions, and other large-scale and complex deals.

Use cases of data rooms

As mentioned briefly, virtual data room providers serve various industries. In particular, a data room provider helps companies increase productivity, reach the level of a high performance, enhance security, gain full control over users and confidential information. 

Besides, a VDR can facilitate difficult processes such as due diligence, mergers and acquisitions, or fundraising. However, this is not the whole list of the most common uses for the virtual data room solution. Firms and large enterprises use the software for many other purposes.

Due diligence

Due diligence is a time-consuming process involving thousands of files and many parties. Before the invention of VDR, due diligence participants used traditional data rooms with physical storage. And unfortunately, it required them to leave offices, go on business trips, and waste money renting premises and doing paperwork.

Thanks to virtual data rooms, the due diligence transaction is greatly simplified and carried out efficiently on the seller’s part. Specifically, the virtual data room solution allows the sell-side to provide all the required documents in a professional and clear way and keep the deal transparent and easy. 

On the other hand, the buy-side gets a convenient space for quick but thorough data research. Besides, the virtual data room software is also the best option to demonstrate a responsible attitude to due diligence, which increases the chances of a successful outcome for the seller.

Investment banking

For investment bankers, as well as for due diligence parties, data sharing plays a vital role. Moreover, they deal with a wide range of people, namely advisory services, regulators, attorneys, consultants, and corporations.

Virtual data rooms for this use case serve as a reliable environment with exceptional services. Thus, bankers can manage the flow of transactions, monitor the activity of multiple parties involved, receive valuable analytics, benefit from multidimensional access controls, and also receive personalized support from the leading virtual data room providers.

Life sciences

Because the drug discovery pipeline along with research and corporate development are getting expensive for life science organizations, they need to keep costs down. Fortunately, online data room providers offer medical device manufacturers, pharmaceutical companies, and those involved in a clinical trial an ideal solution to manage clinical trials, grow business, and collaborate on secure private data. And all these benefits are at an affordable price.

Generally, the cloud platform for life sciences means not only savings and security. In addition, this greatly improves cooperation with investors as organizations can securely share confidential documents in a structured manner and accelerate transaction workflows. As a result, companies assist partners with the flexible decision-making process.

Private equity

As a rule, the sale of assets for profit is these organizations’ main and ultimate goal they want to achieve. Consequently, the virtual data room supports the entire lifecycle of this process, helping them through ownership, purchase, management, and sale. 

At the same time, confidential data is stored on secure data room servers and is available to parties depending on their permissions. Also, since the data rooms are equipped with updates for authorized users, asset managers gain control and understanding of the latest market conditions.

Initial public offering

Raising funds for a growing business involves some challenges, including managing a large number of confidential documents, their analysis, and financial control by auditors, lawyers, and regulators.

For these IPO processes, a VDR solution brings lots of crucial advantages. For example, the best virtual data room software offers real-time analytics and reports, secure IPO intellectual property protection, data transparency, access privileges, basic tools, and advanced functions that are always intuitive.

Real estate transactions

Top electronic data room vendors provide exceptional services for real estate because they simplify the due diligence transaction, governance, document structuring, business communications, and document sharing security for crucial  strategic decisions.

It’s also worth noting that virtual data room software makes real estate agile teams stand out from the competition by offering video tours with attached presentations and photos. Thus, potential buyers do not have to go anywhere to see everything they need.

Virtual data room pricing

Virtual data room vendors choose different approaches to pricing based on the following pricing models:

  • Per page. Companies pay per virtual data room page; sometimes, the price depends on the project scale. It may be suitable for small companies with a set number of documents. However, this is not recommended for large-sized businesses as they may run into cost overruns ordering additional pages.
  • Per user. Data room providers allow a certain number of users and charge a fee for each. Before opting for such a price model, admins should ensure they won’t have to request many additional users later. As practice shows, extra users are more expensive.
  • Data room storage. Here, the number of uploaded files is limited, and additional document storage requires a fee. This model may be suitable for storing a relatively small amount of data.
  • Flat fee. For a fixed price, online data room customers can manage a certain number of participants and documents per month. Consequently, this model allows users to avoid overage fees. And of course, top VDR providers give customers unlimited copies and members, but this is usually the case with a premium suite.

To sum up, potential users should remember – the software features must be tailored to their needs and individuals should not feel the lack of any essential feature. It is what determines cost-efficient solutions and lets you take the first step to effective work and positive changes.