Whether you are a financial professional managing due diligence for a merger and acquisition, a healthcare professional organizing a clinical trial, or a lawyer communicating with a client, virtual data rooms are essential. However, have you ever wondered what people did before virtual data rooms? The development of virtual data rooms was born from the inefficiencies and inconvenience of physical data rooms.
What is a Physical Data Room?
To understand how a virtual data rooms works, let’s examine its predecessor: the physical data room. In the past, if a company wanted to share confidential information with parties such as a potential bidder or auditor, the company went through a tedious process to make sure that only their eyes saw the information. The company set up an on premise room, called a physical data room. The company then set up security surveillance equipment or used a third party to monitor the entire viewing duration for the visit.
Next, the company coordinated schedules to fly parties to their office for access to the data room. When the parties arrived, they’d go through a check-in process to finally be let into the room with only a certain amount of time to review the materials – talk about pressure! They would not be allowed to bring mobile phones or anything with picture or copying capabilities. Each document would be sorted and tracked at the beginning and end of each session to ensure that nothing leaves the room.
What is a Virtual Data Room?
A virtual data room is a cloud solution that allows confidential or private information to be sent and received securely. With the development of virtual data rooms, it is no longer necessary to acquire security, fly out a client, pay for the hotel, and spend time escorting them to and from the data room. Thankfully, we can leave those laborious tasks in the past.
Virtual data rooms allow the company to dictate permissions to the recipient down to the file and even the time of day that the recipient can access it. Virtual data rooms have a tracking system to report who is accessing the documents at any given time and even show click trails. Additionally, permissions can be automatically withdrawn if, for example, the bidder backs out or the auditor is finished.
How Will Virtual Data Rooms Work in the Future?
The future of virtual data rooms rely on vendors understanding the importance of service in this product sector. Most people use a virtual data room for short-term, high-intensity projects. These projects are likely time sensitive and confidential. This means that when the user needs tech support or guidance on the product, it is important that they get it right away. Because of this, the quality of service and technology support for virtual data rooms will become top notch for the technology industry.
In addition, while the traditional uses for virtual data rooms such as mergers & acquisitions and clinical trials will continue to thrive, other uses will appear quickly. Virtual data rooms will soon be used in an ongoing, subscription manor for most companies in regulated industries. These industries are quickly realizing the appeal to being able to securely share files and control the viewability to protect their assets and follow regulations.
It is no longer necessary to spend copious amounts of money setting up a secure room, ensuring protocol is followed at all intervals, and getting your client to and from the data room location. Solutions like ShareFile Virtual Data Room offer all of these features in one easy-to-use technology. ShareFile offers view-only permission, dynamic watermarking, analytics, audit logs, click trails, scheduled reports, and even non-disclosure agreements. Plus, ShareFile offers flexible billing options to meet your business’s needs. For your next deal, try it out for free for 7 days.