Data Room: What is a Virtual Data Room & its Advantages

The current context is forcing more and more companies to look for reliable and highly secure solutions to store their data and confidential information.

For the daily management of your data or for an exceptional event such as a merger-acquisition project or an important financial transaction, the data room is a solution fully adapted to the secure storage and sharing of all your information.

Learn what a virtual data room really is and why these tools are becoming more and more popular.

What is a data room?

A data room is a bit like a data safe. Translated literally, data room means “data room.” It is a secure storage space, real or virtual, where an organization makes available a large volume of often confidential information on a project. Access is restricted and authorized persons can consult the information remotely.

Traditionally, data rooms were used to secure financial or legal transactions, IPOs, or real estate management. But for several years, they have been used for other reasons such as data storage or exchange or document sharing.

All types of documents can be stored, downloaded, saved and managed in a virtual data room: official letters, press articles, charts, spreadsheets, images, etc.

Who can use a data room and why?

Any business that is worried about the security of its data can use a data room. More generally, data rooms are used by companies that process a large amount of confidential data that they must transmit to various audiences such as their employees, customers, users, suppliers or partners (contracts, financing, accounting information, etc.). This information cannot simply be sent by email because of its volume and its confidential nature, a secure collaborative solution is then essential.

According to the site Antinno.net, there are several use cases for a data room, but each time, it is an organization that must make data or information available, in a secure manner, to employees of other organizations, in the context of delicate transactions where confidentiality is an essential condition:

• mergers and acquisitions,
• fundraising,
• corporate restructuring,
• real estate transactions,
• strategic partnerships,
• tenders in sensitive contexts (nuclear, military, etc.).

Data rooms are particularly appreciated in international contexts as well as by companies that have adopted the dematerialization of data.

What are the benefits?

The benefits of data rooms are numerous. Here are five of them.

1. Data protection

This is undoubtedly the main reason why most businesses are opting for a virtual data room. Access to data is restricted and only authorized persons can view stored information.

In addition to basic features, data room providers offer a multitude of options to increase data security and confidentiality, such as:

• a check against malicious software (malware);
• a complex authorization and authentication system;
• data backup;
• file encryption.

2. Easy access and time savings

In today's ultra-connected world, printing your files, storing them in filing cabinets and archiving them in a dedicated room within your company seems completely outdated. And what a waste of time! In fact, if you need an archived document for a client, for example, you will have to travel to find the right file, then you will have to scan the document and send it, and finally, you will have to go back and put it away. All this leads to a loss of time and productivity because while you go rummaging through the company archives, you cannot move forward on your other projects.

A data room allows you to easily and effectively exploit a large volume of data. You quickly find the document you are looking for and share it in just a few clicks. Most data rooms are equipped with a powerful search engine to make things easier for you. And above all, sharing information is done safely.

3. Better access control

In business, it is essential to ensure that certain documents do not fall into the hands of the wrong people. By storing your documents in a data room, it is you, as the owner of the data, who define the rights to read and/or write access to the stored documents. This way, you can be sure that your files are not lost, that they are consulted by the people concerned and you have control over the changes made. These settings can be changed as needed.

4. Practicality and transparency

Another advantage of data rooms is their ease of use. You can access them from anywhere, with any connected device (smartphone, tablet, laptop), unlike physical archive rooms.

In addition, data rooms favor transparency. They are equipped with a notification system that alerts you in real time of changes made. You also have access to the history of activities for each document: the total and detailed number of consultations (per day, per week, per month), the people who consulted it, the changes made, etc. This information can be strategic in the context of a transaction, for example.

5. Reduction in general expenses

Since all your files are stored online, you no longer need to print them, so you'll save money on office supplies like printer cartridges and paper.

Conclusion

Faced with cybercrime, protecting your data is now vital for all businesses. Their safety and reputation are at stake.

If you manage a large volume of confidential data, the use of a data room is essential. In addition to offering you a secure place to share your documents with selected people, you can control access to data and reduce the risk of having your confidential information disclosed to strangers.