Online data rooms are abundant on the Internet, and the ever-toughening competition forces managers to look for ways to improve their effectiveness.

A virtual data room (VDR) is a repository service, which is used for storing and handling documented information (deeds). It is organized in the form of a website, which enterprises and physical persons trustfully use for securing all types of corporate and confidential information.

VDRs are used with great convenience and provide document security for all sorts of organizations operating in the following spheres, to name a few:

  • Accounting;
  • Investment and banking
  • Real estate businesses;
  • Consulting;
  • Power generating;
  • Healthcare and pharmacy;
  • Biology and ecology;
  • IT and media;
  • Legal matters.

Online data room providers are very helpful in mergers and acquisitions (M&A) and other transactions, as it is one of the safest ways of storing data relating to assets and companies being acquired and/or sold. This data help parties to monitor transactions and guarantee a due degree of transparency for those involved. Data rooms facilitate the due diligence process, which should accompany transactions and provide a legal basis for any business activity.

On the other hand, document security management services use advanced access control functions, which should facilitate an access for customers and eliminate the risk of unsanctioned use of data and hacking. To do so, they use advanced software, as well as encryption, authentication, anti-virus protection and other tools and techniques to ensure the maximum security of data. A secure virtual data room will provide a user with logins, passwords and security codes, which are sent to their mobile phones as SMS or secured otherwise.

A decent and secure VDR should feature a user-friendly and intuitive file management system with simple search options and file grouping algorithms. For example, if the information is stored in several files, there should be a tool enabling the user to group these files in a cluster, thus, facilitating search and access. Last, but not the least, users should be able to modify their files within

the repositories.

There are tons of data room service providers, and their number continues to grow exponentially. In this context, the choice of an appropriate service gets a little tough. Not all services are good for a particular type of business. As follows from the above, it is advisable to apply for a secure VDR based on the following criteria:

VDRs for document security

  • Document security;
  • Access security;
  • Reputation;
  • Price.

Document Security

Document security management is the fundamental of virtual data room information storage. As long as online data room service is designed for storing files, a user should enjoy an opportunity to effortlessly handle his or her files without any safety concerns. Particularly, he/she should be able to exchange and distribute the information contained in the files and be sure that all the operations are safe, and no data will become available for a third party.

Document security takes on specific importance during M&A transactions and due diligence procedures because loads of sensitive information have to be shared with other persons, and there is a risk of disclosure and theft. In this situation, this kind of data room would be irreplaceable.

Access Security

 

Most online data storage services apply document security techniques and features that prevent the unsanctioned use of documents.

For example, once a document is downloaded from a VDR, it receives a dynamic watermark with the user’s name (and sometimes IP), date of download and project’s name.

A secure VDR can use a kind of document expiry technique, which launches the process of document destruction once it is downloaded by a third party. The document will collapse or become blocked before the third party has downloaded and tried to open it. This technique allows document owners to prevent unauthorized access and distribution.

In some cases, a restricted viewing feature can be used, which automatically hides or blurs a large part of a document and makes it unreadable for third parties.

Secure data rooms online allow users to customize and apply document protection options. They can set up sharing, viewing, downloading, printing and editing parameters for specific categories of users and choose who they want to let in on their corporate secrets. A particular user can have a specific set of rights for a document: some may be free to handle it in all possible ways, while others will not be able to even view it.

Certified and Secure Virtual Data Room Service Provider

Choosing an appropriate data room service provider poses some challenge, especially for novice users. There are tons of companies, both young and old, and it takes quite a bit of time and effort to make the right choice and ensure decent document security management. The price is very high because the whole thing is about sensitive information.

This is the case when users must exercise great care and really know what they want for the price they are ready to pay. They must be sure VDR services have all the tools, techniques and policies that fit their businesses. There are lots of feature-rich online data room providers, and there is a risk of getting involved with ones, whose features may prove useless in a particular case.

To avoid the confusion, a user must outline his/her goals and strategies, create a kind of a virtual data room template and make a thorough virtual data room comparison prior to making the final decision. It is advisable to check and research four to five popular repositories. As a rule, a data room will share details, demonstrate readiness to directly consult potential clients and provide trial versions of their software. These versions have basic features, which potential customers can test and try for a limited period of time (30 days or so). Another feature is customers’ reviews: read what other users say about what is meant to be a secure data room online and draw your own conclusions!