The selection of the right virtual data room provider is vital because choosing the wrong one can give you nightmares. Many data room consumers, especially first-timers, overlook the importance of suitable virtual data room providers that can give them solutions according to their business requirements.
Suppose you choose a data room software with compromised data security and insufficient features. In that case, it will not only waste your financial resources, but you may end up losing your corporate secrets. If you are having doubts and are unable to decide how to find the right VDR, here is an introduction to virtual data rooms and the ultimate guide to choosing the best data room providers.
What Is Online Data Room Software?
Online or electronic data room software is an online cloud-based data storage and management platform for businesses, professionals, government agencies, nonprofit organizations, companies, and other business entities.
Virtual data rooms give you the luxury to access, edit, share, exchange, transfer, annotate, download, save, and print your business or personal documents in one place. All modern-day data room services support commonly used file formats like audio, videos, documents, images, etc.
In addition to data storage and management, a virtual data room comes with essential business communication tools. For example, you can send and receive messages and files via chat messengers. VDRs can help you plan and conduct online business meetings and arrange real-time Q&A sessions. Voting tools and live polls are other useful communication tools.
Lastly and most importantly, VDR technology has revolutionized the deal-making process. The corporate sector uses online data room software for communication and due diligence in M&As, joint ventures, capital raising, initial public offerings, strategic partnerships, private equity acquisitions, asset sale/purchase, and real estate trades.
| M&A and due diligence are among the most common data room use cases. You can read more about data room benefits for due diligence at https://dataroom-providers.org/due-diligence-virtual-data-room/ |
Things to Consider When Choosing a Data Room Provider
1. Virtual Data Room Security
Security should be your primary concern, no matter which virtual data room provider you go for. For example, any reliable data room vendor should be ISO-certified.
Also, depending on the industries and geographical regions, data rooms have to comply with local cyber security standards. A VDR vendor offering services to financial institutions in the USA must be FINRA-compliant. Other notable certifications include HIPAA, SSAE, GDPR, SOC1, and SOC2.
Apart from certifications, here are some mandatory security features to look for:
- Two-step verification: This feature is necessary to restrict the entrance of unauthorized people into the data room. It requires users to go through at least two identity verification processes.
- User permission settings: Data room administration must control user access and activities in the data room. For this purpose, VDR administrators should be able to restrict any user from accessing or performing any action on any file.
- Digital watermarks: This feature prevents copyright claims and helps the document owner track the file and any changes made to it.
Other important security features include granular access, document shredding, remote device purging, and document revocation.
Also Read: What Impact Does Big Data Have on Organizational Decision-Making?
2. Virtual Data Room Review
Apart from security, a thorough virtual data room review is a must-do thing. You can review a VDR from various angles.
Here is how:
- Relevant industry experience: When it comes to virtual data rooms, every business has unique needs. A pharmaceutical company and a law firm will have different expectations from VDRs. Make sure the vendor you are choosing has decent experience in your particular industry.
- Pricing method: Being unable to understand VDR pricing can make you pay more than you should. If you need a VDR for the long term, a flat-monthly fee model will be highly suitable. If you need to share a small number of documents temporarily, go for per-page pricing.
- Feature set: Having all the necessary tools in your data room is essential. If you intend to use your VDR for mass-level data management, make sure you have such essential document management features as a bulk upload, drag-n-drop, fence view, file tracking, file indexing, full-text search, etc.
- Online customer reviews: It is highly recommended to read online customer reviews from trusted websites like TrustRadius, G2, Capterra, and Software Advice. Customer reviews help you identify the shortcomings of any vendor.
- Customer support service: From setting up your virtual data room to troubleshooting, you need active and cooperative customer support. Do not compromise on this section at any cost.
Top 5 Virtual Data Room Providers
The following are the most secure and best data room providers:
- iDeals virtual data rooms
- Merrill Data site
- Intralinks virtual data rooms
- FirmRoom data rooms
- DealRoom deal room
See Also: 7 Best Python Frameworks for Data Science and Web Development
Final words
A hasty data room selection decision may prove to be costly and destructive for your business. Insecure data storage solutions can cost your confidential documents, while unresponsive customer support can slow down things. The above-mentioned are some important aspects to consider when choosing a virtual data room provider.