Before stepping into the virtual realm, it’s important to ground yourself. What exactly is a data room? And why does a data room benefit from virtualization? Here are some good answers to your very good questions.
Physical data rooms are secure places with limited access. Within the confines of its walls, individuals share documents and other information that is related to mergers and acquisitions, private equity, investments, fundraising, real estate dealings, corporate restructuring and other highly sensitive and confidential exchanges that must adhere to strict regulatory and legal guidelines.
In other words, a data room does not have anything to do with online gaming or virtual reality. If that is why you are here, then click on by. For the rest of you: accountants, lawyers, investors, and bankers, please read on.
Virtual Data Rooms
Organizations are no longer housed in singular locations. Centers of finance are no longer in specific geographic locations. Virtual data rooms transcend geographic constraints and time zones. Rather than physical locks and security escorts, virtual rooms live in a highly secure extranet. The site is equipped with access control passwords and secure log-ins that are created by the data room’s vendor or other authority. This authority is responsible for disabling access to those no longer involved in the transaction.
Those who are privy to the transaction in question are able to share documents virtually, make bids, assess information and perform transactions. This is done through controlled access, either individually or by a due diligence group.
The Benefits of Virtual Data Rooms
Virtual data rooms cater to large groups across distances. Even for those in the same location or small organizations, a virtual data room allows for secure storage of documents, activity tracking and real-time file sharing. While there are numerous cloud storage and data sharing options, none are as secure as an access-controlled virtual data room.
Choosing A Virtual Data Room Provider
Virtual data rooms are a growing market. As a market grows costs go down while services improve. Businesses in need of secure transactions have a wide range of provider options and price points from which to choose. Regardless of the vendor, there are a few standards that businesses should consider.
- Security ratings and certifications
- High-security levels such as ISO/IEC 27001 and 27002
- Industry-specific software
Who Uses Virtual Data Rooms?
Organizations or individuals that value private and secure document sharing benefit from secure sites. Secure sites limit who is able to cut and paste documents, print documents or share documents outside of the virtual space. In addition, these secure spaces are being reimagined with industry-specific offerings. Law firms, accounting offices, tech start-ups, and non-profits can choose virtual platforms that adhere to industry guidelines without slowing workflows or disturbing processes.
The rise of security breaches makes secure transactions and data sharing appealing to anyone, maybe even gamers, who want to manage information in a secure environment.