While applications like Dropbox and Google Drive can handle basic requirements for sharing files, they aren’t ideal for due diligence or for the management of sensitive information. Virtual data rooms enable businesses to securely and quickly share confidential documents online with multiple parties, faster than physical meetings or traditional digital devices.
In addition to access to files, VDRs also offer collaboration features. Users can leave comments on files, collaborate with other stakeholders, and for some platforms, even sign documents using secure services like DocuSign. This makes them a better choice for sensitive transactions as opposed to general-access cloud storage where a single breach can expose a multitude of users to privacy concerns and possibly cripple the business operations.
VDRs are generally more expensive than cloud storage with general access due to their high-end security features and the constant advancement of technology. They tend to adhere strictly to the strictest standards for compliance, making them a suitable choice for transactions that require strict document control.
While some businesses might be tempted to utilize cloud storage for their customers instead of a dedicated VDR however, this could turn out to be a costly error. A data breach could result in a significant sum in legal fees, fines and lost revenue, not to forget the loss of confidence with customers. A dedicated VDR offers more security features than cloud storage options, such as fence view, built-in redaction and other security features. This will ensure that sensitive data is secured even when the platform is compromised.