Initially, VDRs were used by lawyers to consult their clients. Today, a wide range of business people, attorneys, and accountants also use best data rooms as a cost-effective and efficient methodology for reviewing documents without physical copies or even an actual meeting room. A well-designed VDR provides fast query execution, efficient traversal of large amounts of data, and reasonable flexibility.
An electronic data room serves to centralize and consolidate large amounts of data from various sources. They provide companies with vast benefits, allowing them to analyze tons of information, extract significant value from it, and store e-records for past periods. Analytical tools enable companies to draw valuable business insights from their data and improve the effectiveness of their decisions.
What does the concept of VDR mean?
A virtual data room provides secure online storage of data and documents related to business affairs, legal transactions, or litigation. VDR uses a central server and extranet connection, a very controlled access Internet connection. This internet connection uses a secure login provided by the respective supervising provider or authority responsible for disabling or enabling secure login at any time.
- Data room software provides increased protection for documents hosted in the storage based on centrally managed policies. You can access such files after multi-factor authentication. Administrators set the rights at their discretion so that users can have individual rights regarding one document.
- In some cases, to develop a startup or maintain a working environment within a company, it is necessary to allow the viewing of documents and files partially. Downloading also requires restriction — all this is possible in VDR.
- It also protects against man-in-the-middle attacks, and access permission can be revoked or granted for a limited time.
At the same time, the client software will control the deletion of documents on the users’ side and block the download of files placed in the repository.
How does online data room software work?
As a rule, online data room software is used to administer access rights to documents and files. Companies are willing to pay for additional software and applications to do this. So they are sure that nothing will be lost, and the risk of information leakage is leveled. Of course, all data exchanged between clients and the storage itself is encrypted, and the digital restrictions management system is also actively used.Typically, VDR is used to make significant corporate transactions, provide access to company reporting during an audit, transfer information to investors, and in other situations when it is necessary to give business-critical data to the side.
To send files, the user uploads them to the storage, sets up access, and sends a link to the recipient. The process can be automated, as many data room vendors integrate file managers, email programs, instant messengers, and other popular software in client applications. In this case, the download and send process looks a little more complicated than attaching an attachment to an email. If the documents are protected using DRM technologies, the recipient will have to install special agent software on the computer that controls the correctness of their use. In this case, there are more control options, but not all types of data can be protected with DRM, usually only Microsoft Office documents.
Who needs VDR & how to choose them correctly?
Currently, virtual data room providers do not limit the range of potential customers to individual industries. First, virtual data rooms are needed by financial companies, construction, engineering organizations, law firms, as well as communication service providers and retailers. They often work with critical information and need the means to send documents to external counterparties or remote branch offices securely. Such customers need to:
- configure document access rights flexibly,
- manage their life cycle,
- and protect them using DRM technologies.
In the telecom and financial sector, the means of protecting user data and marking documents must comply with the requirements of regulators. This is another reason for choosing a specialized solution. In retail, merchandisers and sales agents have to give access to trade secret documents. Moreover, managers need to control viewing documents on mobile devices and delete them in case of the dismissal of an employee.
There are quite a few specialized products in the market with different capabilities and price categories. However, in the general case, to organize a virtual data room, it is worth focusing on integrated best solutions that allow you to manage documents from the moment they are uploaded to the storage until they are deleted on the side of the counterparty. It requires support for DRM technologies and the availability of agent programs for desktop and mobile operating systems. However, customer tasks may not need such data room services. Therefore, to avoid overpaying at the start, it is better to contact a technology partner working in this area to select and implement a business product.
