Corporate data is confidential information that third parties should not hold. However, modern technologies only complicate the process of saving data. For example, servers can be hacked; they can physically fail. Therefore, large enterprises are looking for an opportunity to keep their data under lock and key. For this case, services have been created that are called virtual data rooms.
What is a virtual data room?
The concept of virtual data room software is simple – it is software that allows a group of people to work with files and documents. The room administrator can decide what rights certain participants work in the room. In terms of content, VDR resembles an advanced data cloud.
Why were VDRs initially needed?
Initially, the main task of VDR was to facilitate mergers and acquisitions of companies. However, these transactions have always taken a considerable amount of time from employees of both enterprises. They required separate premises, and in the process, any files could fall into third parties or even disappear altogether.
When Internet access became commonplace, extensive holdings decided: enough to endure inconvenience. If it is possible to transfer this process to the Internet, it should be done.
How are VDRs currently being used?
The technology has become popular: data room for business is now used by almost every large company. With this service, the following operations are possible:
- Conducting corporate reporting. As well as the analytics tools present in virtual data rooms, it is possible to obtain accurate information about the state of affairs of the enterprise.
- Archiving old documents. You do not need to maintain a vast archive with files where tons of paper documents gather dust. Instead, all information can be transferred to a virtual room.
- IPO preparation. If you have ever been involved in putting a company up for public auction, you know that this process can take about 6-12 months. And during this time, a ton of information will be required. So therefore, it is much easier to store it in one place – a virtual data room.
- Mergers and acquisitions. The historical need for VDR is justified now: any transaction between two large companies now needs a reliable file buffer.
- Restructuring and bankruptcy. Any significant financial manipulation is easier to carry out if your company has its virtual data room.
- Teamwork on a project. It doesn’t matter what kind of project you have – construction, architecture, development, or finance. A virtual data room usually has tools for working with different files so that team members can work right there.
The VDR tool is convenient for company employees and the administrator (manager). Here you can see who, when, and how ruled documents; you can set access levels for different employees.
The Future of Virtual Data Rooms
Now this industry is developing rapidly. New services appear old ones are improved. Currently, only at the top of VDR you find 10-20 different programs. For example, iDeals, ShareFile, Box, Intralinks, and DealRoom are considered the best.
The key issue is security. The creators of virtual data rooms are working on it. New encryption systems are emerging, and the ability to restrict access to files is being supplemented. Many virtual rooms add special characters to their files, which makes them felt if the file manages to be illegally removed from the room.